Sally Bercow, the wife of the Commons Speaker, is being sued for libel over a tweet which allegedly linked a former Conservative politician to false child abuse allegations.
Law firm Carter-Ruck confirmed it is representing the outspoken former Celebrity Big Brother contestant and ex-Labour council candidate against a £50,000 claim by Lord McAlpine.
The former Tory politician was mistakenly implicated by Newsnight's November 2 broadcast in a paedophile ring that targeted children at a care home in Wrexham.
The peer's name was then widely mentioned on the internet, including social networking site Twitter, by users including Mrs Bercow, wife of John Bercow, comedian Alan Davies and Guardian columnist George Monbiot.
A spokesman for Carter-Ruck confirmed the firm was representing Mrs Bercow, 43, against proceedings of libel brought by Lord McAlpine. "He's limited his claim to £50,000 in the court," the spokesman said.
Mrs Bercow later deactivated her account but has now reopened it, sending a message on the site which said: "Humbly reactivating account on#Levesoneve *grabs tinsel & mince pies* coz learnt lesson, miss Twitter & will not screw up again. Hello!"
Last month Lord McAlpine reached a £125,000 settlement with ITV after Phillip Schofield brandished a list of names and handed it to Prime Minister David Cameron during a live interview asking him to investigate them further.
The peer also won £185,000 in compensation from the BBC following the botched Newsnight investigation into the alleged child abuse. Lord McAlpine was mistakenly implicated by Newsnight's broadcast in a paedophile ring that targeted children at a care home in North Wales. Although the programme did not name the peer - referring only to a senior Conservative from the Thatcher era - he was quickly identified online. Newsnight carried a full, on-air apology for the broadcast a week later. An official report into the botched investigation by the BBC's Scotland director, Ken MacQuarrie, concluded that Newsnight staff had failed to complete "basic journalistic checks".
At the time of the payouts by the BBC and ITV, Lord McAlpine's lawyers confirmed they were still pursuing Twitter users who wrongly tweeted or retweeted the allegations. Lord McAlpine has asked those who linked him to child abuse allegations to apologise formally and pay a "sensible and modest amount", which he plans to donate to BBC Children In Need.
In a statement, Lord McAlpine's lawyer Andrew Reid said: "I am disappointed that the press has become aware of the proceedings between Lord McAlpine and Sally Bercow. However, I am still hopeful that we will be able to reach a sensible agreement to settle this matter with the second set of solicitors, instructed by Mrs Bercow, without the need to proceed to a trial. We have no further comment to make, and do not intend to deal with this issue through the media."