Orlowski gets it wrong
The Milly Dowler revelations did not "turn out to be false". One aspect of the original Gruaniad story was wrong: that Murdoch's hacks deleted messages from the dead girl's phone to make way for more incoming messages. It later emerged these messages had expired automatically from her voicemail.
The fundamental facts of the story are correct. The News of the Screws DID hack into the dead girl's phone and listen to her voicemail. News International (proprietor R. Murdoch) paid £2m+ compensation to the girl's family and the Dirty Digger himself made a personal donation of £1m to charity. This would not have happened if the Milly Dowler revelations were as false as the line Orlowski is trying to spin.
In addition News International has not disputed that the News of the Screws hacked Milly Dowler's phone. Which they would have done if the story was untrue. ISTR the latest, proper police investigation into phone hacking confirmed that the News of the Screws had hacked Milly Dowler's phone.
The News of the Screws also interfered with the police investigation into Milly Dowler's abduction and murder. They left fake voicemail messages suggesting the dead girl was trying to find work via an employment agency. (IIRC the phone number on left on those voicemail messages was actually a contact for a Murdoch hack.) This resulted in police chasing up bogus leads in the wrong part of the country.