* McAlpine says angry at being wrongly named as paedophile
* Lawyer opens prospect of action against Internet users
* UK regulator investigates BBC, ITV over abuse reports
* British police arrest man in BBC abuse investigation
By Matt Falloon and Guy Faulconbridge
LONDON, Nov 15 (Reuters) - A former treasurer of Britain’s Conservative Party, wrongly accused of child sex abuse, edged closer to a settlement with the BBC on Thursday and his lawyer said those who had sullied his client’s reputation should get in touch and reach deals.
The threat may ensnare hundreds of Twitter users and bloggers who wrongly named Lord Alistair McAlpine, an ally of former Prime Minister Margaret Thatcher, as the unidentified Conservative accused in a BBC report of abusing boys in social care.
The flawed report sparked one of the worst crises in the broadcaster’s 90-year history and claimed the scalp of Director General George Entwistle, after the abuse victim central to the BBC investigation said McAlpine was not one his attackers.
“What we’re basically saying to people is, look, we know - in inverted commas - who you are, we know exactly the extent of what you’ve done,” McAlpine’s solicitor, Andrew Reid, told the BBC.
“And it’s easier to come forward and see us and apologise and arrange to settle with us because, in the long run, this is the cheapest and best way to bring this matter to an end.”
The BBC has apologised for the McAlpine report and Reid said he hoped to reach an out-of-court settlement with the corporation on Thursday.
The controversy convulsed the national broadcaster just as it was trying to grapple with revelations that a former star presenter, the late Jimmy Savile, was one of Britain’s most prolific sex offenders.
Police investigating child sex abuse claims against Savile, who died last year aged 84, said on Thursday they had arrested a fourth man. Police did not disclose the name of the man, who is in his 60s.
The BBC’s much-criticised handling of the Savile allegations and the mistaken child abuse report on Newsnight prompted BBC Trust Chairman Chris Patten to warn that the world’s biggest broadcaster was doomed unless it reformed.
Patten, a former Conservative minister who is best known for handing back Hong Kong to China in 1997, was due to meet the 11 other BBC trustees on Thursday in an attempt to plot a way out of the crisis and find a successor to Entwistle, who quit on Saturday.
McAlpine, who is 70 and in poor health, said in a BBC interview it had been a “horrendous shock” to find out that he was being linked to a claims of a high-level paedophile ring.
“It gets into your bones... it makes you angry. And that’s extremely bad for you to be angry. And it gets into your soul and you just think there’s something wrong with the world.”
McAlpine said the BBC should have called him about the allegations before airing the report.
“They could have saved themselves a lot of agonising and money, actually, if they’d just made that telephone call,” McAlpine said. “I would have told them exactly what they learnt later on... That it was complete rubbish.”
At the height of the frenzy following the Newsnight show on Nov. 2, a presenter on an ITV chat show brandished a list of alleged abusers during an interview with Prime Minister David Cameron.
Britain’s media regulator said it was investigating both the BBC Newsnight report and ITV.
The regulator, known as Ofcom, could theoretically fine ITV a maximum of up to five percent of annual turnover while the maximum fine for the publicly funded BBC, which is not an Ofcom licensee, would be 250,000 pounds ($396,200).
Other penalties open to Ofcom are directing the broadcasters not to repeat the allegation, or to issue a correction.