Lord McAlpine said he wants to restore his reputation after Twitter users wrongly linked him to historical allegations of child abuse.
Speaking to Channel 4 News, he said, "Obviously I want to restore my reputation, but I also realise - because it happened to me - that you can get one call, you can get piece on a programme and all of a sudden this escalates to thousands and thousands of people who have this information".
"Two weeks ago I was living quietly in southern Italy gardening, passing my time of day. A retired figure who nobody heard of, nobody barely thought about and suddenly I find the whole world has collapsed on me".
The Conservative peer also said he was "in shock" following the BBC Newsnight report that sparked the false allegations.
Lord McAlpine said Newsnight did not contact him about the claims and that he was "amazed" the programme said it was unable to reach him by telephone.
More top news
The 'sugar tax' outlined in Chancellor George Osborne's March budget will "hit the poor the hardest", critics claim.
A woman who was "dragged away" by a crocodile as her friend tried in vain to rescue her is reportedly still missing in Australia.
Police say at least one gunman armed with a high-powered rifle, began "shooting randomly" resulting in the death of a man in his 50s.