Dowler's family may receive £2 million payout - ITN

News International will pay £3 million to settle phone-hacking claims by the family of murder victim Milly Dowler, according to sources.

The settlement is likely to consist of a £2 million payout to the murdered schoolgirl's relatives and at least a one million pound donation to charity.

News International has confirmed it is negotiating with the family of the 13-year-old, who was abducted and killed by Levi Bellfield in 2002.

A News International spokesman said: "News International confirms it is in advanced negotiations with the Dowler family regarding their compensation settlement.

"No final agreement has yet been reached, but we hope to conclude the discussions as quickly as possible."

Mark Lewis, lawyer for the Dowler family, has declined to comment.