Lord McAlpine has dropped defamation claims against Twitter users with fewer than 500 followers who wrongly named him as a paedophile.
The Tory peer, who was mistakenly linked to abuse allegations, has instead asked that they give a £25 donation to Children In Need.
Lord McAlpine has written to the individuals involved and now says he wants to draw the "unfortunate episode" to a close.
But he is still pursuing Sally Bercow, the wife of the Commons Speaker, and says this is now his lawyers' main focus.
The peer was wrongly implicated by a BBC Newsnight programme last November about a paedophile ring operating at a Welsh care home.
The story sparked frenzied speculation online about who was involved and led to his name being linked to the scandal.
Sally Bercow is still being pursued by Lord McAlpine's lawyers The BBC, which was already battling the Jimmy Savile crisis, agreed a £185,000 settlement after the broadcast.
ITV and Phillip Schofield also had to pay out £125,000 after the This Morning presenter held up a list of people who had been named on the internet.
In a statement on Thursday, the peer said he would cover all administration costs for the low-circulation Twitter libels.
"Whilst I reached a settlement last year with both the BBC and ITV, I would like to now draw this unfortunate episode, forced into my life, to a close," he said.
"I have dropped all claims against those tweeters with less than 500 followers, in return for a very modest donation to BBC Children In Need, which funds 2,600 projects supporting disadvantaged children and young people in the UK.
"I have requested that my lawyers, RMPI LLP, focus on the action against Sally Bercow and that damages arising from this are donated to a charity of her choice."
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