Lord McAlpine's counsel, Sir Edward Garnier QC, confirmed to Mr Justice Tugendhat that the action followed last month's Newsnight broadcast about the alleged sexual abuse of boys at the Bryn Estyn children's home in Wales in the 1970s and 1980s.
Two victims claimed that they suffered abuse "at the hands of a leading Conservative politician from the Thatcher years". The item did not name Lord McAlpine, but the programme-makers intended him to be the target of the allegations, he added.
Unfortunately, in fact disastrously, names had already been named. Throughout the day on November 2, Newsnight's forthcoming report had been widely trailed on the internet. Furthermore, Lord McAlpine's name had been linked to it. In the aftermath of Newsnight's broadcast, Lord McAlpine was widely identified as the subject of Newsnight's allegations.
In short, Newsnight made the most serious of defamatory allegations about Lord McAlpine, tarring him as a paedophile who was guilty of sexually abusing vulnerable young boys living in care. Those allegations are untrue. As the BBC now accepts, they were utterly baseless. These disgraceful allegations should never have been made.
More top news
Fast-melting Arctic sea ice has forced some 35,000 Pacific walruses to retreat to the Alaska shoreline.
One of the most notorious Mexican drug lords still at large has been captured by soldiers at a seafood restaurant in a picturesque town.
A dossier of online abuse directed at the parents of Madeleine McCann is being examined by police.