The family of the murdered schoolgirl Milly Dowler have been offered £3 million in damages from News International after the publisher of the News of the World admitted her phone had been hacked.
The payout will include a personal £1 million donation to charity from Rupert Murdoch, the News Corporation chief executive and chairman, as well a £2 million settlement directly to the Dowler family.
James Murdoch, the chairman of News International, is understood to have personally approved the offer as the company tries to rebuild its reputation following the scandal which led to the closure of the Sunday tabloid.
Sources close to the negotiations said an initial offer of £1m to the Dowler family and a further £1m to a charity in memory of Milly had been rejected by the Dowlers, and that the final sum would now be £3m, of which £2m will go to the family.
The offer is currently being considered by the family and has yet to be accepted after they had hoped for a payout closer to £3.5m.
Sources also said the £1 million donation will come from Rupert Murdoch personally. It is not yet known which charities are set to benefit.
The settlement is three times the biggest payout to any other victim of phone hacking, but reflects the gravity of the actions of News of the World journalists in accessing the murder victim’s voicemails.
The 13 year-old was still being treated as a missing person when the News of the World arranged for her messages to be intercepted in 2002.
In July, Rupert Murdoch, the head of News International’s parent company, met the Dowler family to make a personal apology to them.
James Murdoch shut down the News of the World as a direct result of the discovery that Milly Dowler’s phone had been hacked. Rebekah Brooks, the chief executive of News International, later resigned.
A News International spokeswoman confirmed on Monday night that it was in “advanced negotiations” with the family about a compensation settlement.
She added: “No final agreement has yet been reached, but we hope to conclude the discussions as quickly as possible.”
Mark Lewis, the solicitor representing the Dowler family, declined to comment on the negotiations, saying only that the final figure would be “substantial”.
By Gordon Rayner, and Andrew Hough, The Telegraph