Lord McAlpine is donating compensation he receives from defamatory posts on Twitter to BBC Children in Need, it has been revealed.

The Tory peer has asked those who linked him to child abuse allegations on the social networking site to apologise formally and pay a "sensible and modest amount".

A statement from Lord McAlpine's lawyers this evening said: "The fixed donation amount is yet to be assessed. However, this will be to Lord McAlpine's charity of choice, BBC Children In Need, and will be in addition to an administration fee.

"Given the large amount of information that continues to be disseminated, the band for which the charity payment will be settled shall be when Lord McAlpine has a full understanding of this material.

"The donation is intended for tweeters with fewer than 500 followers, but those with larger numbers of followers are still encouraged to identify themselves and offer their formal apologies at this stage."

It is understood the deal does not cover the £185,000 payout from the BBC over the Newsnight programme that sparked the wave of online speculation, but did not name Lord McAlpine.

The former Conservative Party treasurer is seeking an even larger settlement from ITV after This Morning host Phillip Schofield confronted the prime minister with a list of supposed abusers during an interview.

Comedian Alan Davies and the Commons Speaker's wife Sally Bercow are among the prominent figures who have already apologised for linking the peer to child abuse allegations on Twitter.

Mrs Bercow posted on 4 November: "Why is Lord McAlpine trending? *innocent face*." She appeared to have deactivated her account and quit the site on Tuesday.

Lord McAlpine's solicitor, Andrew Reid, has said action is being considered against a "very long list" of Twitter users.