( CNN ) -- The BBC will pay British politician Lord Alistair McAlpine £185,000 , or about $ 293,480 , to settle his libel claim arising from a news program about child abuse allegations at children 's homes , the BBC said Thursday . `` The settlement is comprehensive and reflects the gravity of the allegations that were wrongly made , '' the BBC said . A BBC `` Newsnight '' program on November 2 focused on allegations of child abuse from the 1970s and 1980s at children 's homes in Wales . It said two victims had alleged that a Conservative , Thatcher-era politician , whom it did not identify by name , had been among their abusers . After Internet speculation identified McAlpine , a senior political figure of the 1980s , as the alleged abuser , the victim admitted he had identified the wrong man . Alastair Campbell : Despite its failings and our past clashes , I back BBC . The BBC aired an apology the day after the program was broadcast , but it did little to contain the fallout from the false accusation . On Monday , the BBC announced that an internal investigation concluded the program 's production was marked by a series of `` unacceptable '' failures . The investigation into the program was carried out by BBC Scotland Director Ken MacQuarrie , who noted that the complex story had moved from commission to transmission in six days , an unusually short period for the BBC . During the controversy about the story , McAlpine , former treasurer and deputy chairman of the Conservative Party , denied any involvement and indicated he would take legal action , MacQuarrie 's report said . The story was the second major crisis to hit the BBC within months . In late September , the BBC became embroiled in a scandal over its handling of sexual abuse allegations against its late TV presenter Jimmy Savile . Latest arrest in Savile sex abuse investigation . The scandal exploded amid revelations that `` Newsnight '' pulled a report into allegations against Savile ahead of a planned tribute to the late TV presenter by the news organization scheduled to air later this year . Former BBC Director General George Entwistle and others were called in front of lawmakers to answer for the scandal surrounding Savile , who authorities say was suspected of having sexually abused young women and girls , sometimes on BBC premises . The BBC had established a separate chain of command for all stories related to Savile , but it was not clear whether the Wales story was regarded as Savile-related , MacQuarrie 's report said . `` As a consequence there was ambiguity around who was taking the ultimate editorial responsibility for the 'Newsnight ' report , particularly in the days leading up to the day of transmission , '' it said . In addition , some `` basic journalistic checks were not completed '' during the editorial process , it continued . `` Specifically , identification was not confirmed by photograph with the first victim . The second victim could not be traced in order to provide up to date corroboration . ... No right of reply was offered to the unnamed individual at the center of the allegation . '' The `` key parties '' did not agree on who was responsible for the final editorial approval for the story , he added . Before MacQuarrie 's review was completed , BBC News Director Helen Boaden and her deputy , Steve Mitchell , were asked to `` surrender all their responsibilities '' pending the outcome of the review , the BBC said . BBC in crisis : What have we learned ?
NEW : The controversy is the second major crisis to hit the BBC in recent months . The BBC will pay Lord Sugar £ ##500 , or about $ 293,480 . The settlement ` ` reflects the impact of the decision ... wrongly made , '' the BBC says . The case stemmed from a BBC ` ` ' '' program on child abuse allegations .