Next Gen News

Milly Dowler's family have been made a £3m offer by Rupert Murdoch's News International in an attempt to settle the phone-hacking case that led to the closure of the News of the World and the resignation of the company's chief executive, Rebekah Brooks.

The money on the table is understood to include a personal £1m donation to charity by Murdoch himself as well as contributions to the family's legal costs. But the publisher has not yet reached final agreement with the Dowler family, whose lawyers were thought to be seeking a settlement figure closer to £3.5m.

The seven-figure sums under negotiation are far larger than other phone-hacking settlements reached - and amount to one of the largest payouts ever made by a newspaper owner - reflecting the fact that the phone-hacking case affected a family who were victims of crime.

Milly Dowler went missing aged 13 in March 2002 and was later found murdered.

Other lawyers bringing phone-hacking cases have privately indicated that they would be advising many of those bringing actions to try to reach a settlement rather than take their cases to lengthy and expensive trials. A handful of cases have been taken forward as lead actions by Mr Justice Vos, to establish a benchmark for settlements in future lawsuits. However, with the amount of damages alone offered to the Dowler family expected to amount to well over £1m, the settlement easily exceeds other high-profile payout made by newspapers by way of apology.

In 2008, Kate and Gerry McCann, the parents of the missing Madeleine McCann, accepted £550,000 in damages over more than 100 "seriously defamatory" articles published by Richard Desmond's Express newspapers.