The publisher of the UK's Daily Mail and MailOnline has been forced to pay more than $150,000 and apologise to a Palestinian aid group for publishing "false terror and extremism allegations".

In a court settlement disclosed on Thursday, Associated Newspapers admitted to publishing two articles that included libellous claims against Interpal, a British group that provides aid to Palestinians.

The publisher agreed to pay about $152,000 (£120,000) in libel damages to the trustees of Interpal, as well as the charity's legal costs.

The articles falsely inferred that Interpal was a terrorist organisation and that it "had supported a 'hate festival' in Gaza in which children acted out the murder of Jewish people", the law firm representing the charity, Carter-Ruck, said in a statement.

Interpal welcomed the legal settlement, saying its "timing and amount ... are particularly noteworthy within the context of the ongoing wider agenda to politicise humanitarian aid to Palestinians".

"We hope that this significant success will encourage commentators and others to take seriously their responsibility for reporting unbiased, accurate information to the general public and service providers," said Ibrahim Hewitt, chairman of Interpal's trustees.

The attacks on a great Palestinian charity by UK Lawyers For Israel must end Read More »

The charity had steadfastly denied the claims made in the Daily Mail and MailOnline articles.

The US designated Interpal as a terrorist organisation in 2003 but failed to provide evidence of any terror activities.

The UK's charity commission - the government body that regulates aid groups - reviewed the US's designation but did not find any evidence to change Interpal's legal status as a charity, The Guardian reported on Thursday.

Interpal also quickly condemned the Gaza festival and the play in which the incident in question occurred, the Carter-Ruck statement read.

MailOnline, the Daily Mail's digital arm, posted a correction on each of the articles in question. The Daily Mail also published corrections "prominently in the print edition", Carter-Ruck said.

"Neither Interpal nor its Trustees, have ever been involved in or provided support for terrorist activity of any kind," one of the corrections read, according to the law firm.