By Guy Faulconbridge and Michael Holden
LONDON (Reuters) - A child rape victim apologized on Friday to an ally of former prime minister Margaret Thatcher who had been falsely identified on the Internet as his abuser, after days of furious speculation of a high-level pedophile ring in Britain.
Steven Messham, who had told a flagship BBC show last week he was abused as a child in social care by a leading political figure in the late 1970s, said former Conservative Party treasurer Lord Alistair McAlpine was not among his attackers.
The BBC, reeling from Messham's disclosure, apologized "unreservedly for having broadcast this report", and froze all investigations on its Newsnight program for reassessment.
McAlpine, 70, who served as Conservative treasurer from 1975 to 1990, had earlier been forced to deny a flood of Internet allegations, saying he had been wrongly named in a "media frenzy" as the mystery pedophile.
From the BBC to the police and the National Health Service, some of Britain's most venerated institutions have grappled with claims they failed to protect children from Jimmy Savile, a former BBC presenter who was unveiled as a prolific child sex offender in October.
A November 2 report by Newsnight about child abuse involving an unidentified Conservative Party figure, and claims by a lawmaker about a pedophile ring with links to a former prime minister's aide, propelled the scandal firmly into political circles.
Prime Minister David Cameron commissioned an investigation after the BBC report, and a host of Conservative Party figures - including McAlpine - were named on Internet and social media sites as pedophiles whose alleged crimes had been covered up.
The blunder is another embarrassment for the state-funded broadcaster which is already facing awkward questions over why Newsnight axed an expose of Savile after his death last year.
"I want to offer my sincere and humble apologies to him and his family," Messham said of Lord McAlpine.
"After seeing a picture in the past hour of the individual concerned, this is not the person I identified by photograph presented to me by the police in the early 1990s, who told me the man in the photograph was Lord McAlpine."
McAlpine's lawyers said they would take "legal action against all media who have defamed Lord McAlpine's reputation and published defamatory statements".
"He's broken hearted over this, his family is very upset and he feels that, bearing in mind his health isn't that good, that this is a total shock to receive at his time in life," one of his lawyers, Andrew Reid, told the BBC.
Any allegations linking the scandal to the Conservatives could be damaging to Cameron's party - which rules in an uneasy coalition with centrists - and may tarnish the image of the era of Margaret Thatcher, prime minister from 1979 to 1990.
Cameron has warned that speculation about the identity of alleged abusers could become a "witch-hunt" of homosexuals.
"I have heard all sorts of names bandied around and what then tends to happen is, of course, that everyone then sits around and speculates about people, some of whom are alive, some of whom are dead," Cameron said during an interview on Thursday.
During the ITV television interview, Cameron was passed a piece of paper with the names of people identified on the Internet as being alleged child abusers. Some of the names were visible to viewers.
"There is a danger, if we are not careful, that this could turn into a sort of witch-hunt, particularly against people who are gay," Cameron said.
At least 10 inquiries have been ordered amid allegations of cover-ups at the BBC, the police and at senior levels of public life, including one into widescale assaults at children's care homes in North Wales where Messham was abused.
Messham's lawyer said his client would still co-operate with that inquiry.
"Mr. Messham has spent many years living with the memory of abhorrent abuse perpetrated by individuals whom were never brought to justice," lawyer Mike Gray said in a statement.
A major police investigation is also under way into claims by hundreds of victims that Savile and accomplices abused them. Detectives have questioned former glam rocker Gary Glitter and comedian Freddie Starr. Both men have been released on bail.
(Additional reporting by Isla Binnie in Wrexham and Matt Falloon in London; Editing by Ralph Boulton and Michael Roddy)