The BBC said on Thursday it had agreed to make a substantial payout to the former private secretary of the late Princess Diana over the corporation's now much-criticised 1995 interview with the royal.
Last May, a report concluded that BBC journalist Martin Bashir had used deceit to obtain the interview which caused a sensation when Diana admitted to an affair, and shared details of her marriage to the heir to the throne, Prince Charles.
In a statement, the BBC said it had now reached a settlement with Patrick Jephson, who worked for Diana until shortly before her 1997 death in a Parish car crash.
"The BBC accepts and acknowledges that serious harm was caused to Commander Jephson as a result of the circumstances in which the 1995 interview with Diana, Princess of Wales was obtained, which have become apparent as a result of the Dyson Report," the statement said.
"The BBC apologises unreservedly to Commander Jephson for the harm caused to him and has paid his legal costs. The BBC has also paid Commander Jephson a substantial sum in damages, which he intends to donate in full to British charities nominated by him."
In a statement, Jephson said it was a "relief finally to reach a conclusion to this painful episode".
The report, headed by former senior judge John Dyson, found that Bashir had deceived Diana's brother into arranging a meeting with her by producing fake bank statements suggesting she was being bugged by the security services and that two senior aides were being paid to provide information about her.
Its conclusions drew an angry rebuke from Diana's son, Prince William, who said the 'Panorama' interview had poisoned his parents relationship and hurt countless others.
(Reporting by Michael Holden, Editing by Paul Sandle)
