Labour MP Andrew MacKinlay accepted substantial undisclosed libel damages from the BBC yesterday over a claim that he had stood to gain financially from an amendment he had proposed.
MacKinlay, who has represented Thurrock in Essex since 1992, had brought proceedings in London's High Court over a Newsnight broadcast in April.
His solicitor advocate, Paul Fox, told Mr Justice Eady the programme alleged MacKinlay had proposed an amendment to a Government motion on MPs' expenses so that he would benefit financially, and in that way had acted in an unprincipled and selfish way and abused his position.
He added: "This was untrue. Mr MacKinlay did not stand to benefit financially.
"Mr MacKinlay was deeply hurt and embarrassed by the broadcast. Whilst such an allegation would at any time be extremely damaging to Mr MacKinlay's reputation both politically and personally, it was doubly so in the then febrile climate concerning MPs' expenses."
Fox said the BBC had agreed to pay MacKinlay substantial damages and his legal costs.
The BBC's solicitor advocate, Robert Brosgill, said the corporation accepted MacKinlay had not stood to gain financially from the amendment he proposed.
It accepted the allegation should not have been published and offered its apologies.
A BBC spokeswoman said later: "A statement has been read out in open court which is a matter of public record. We have accepted the item was inaccurate and apologised."