From the Needles Park website (part 1 of 2):
"The original lighthouse was erected in 1785 on the summit of the Downs at the western extremity, 462 ft above sea level.
However, it was generally considered that the building was too elevated above sea level to be really useful, especially in poor visibility,
and it became disused when its replacement had been built.

"The name 'Needles' is believed to have been derived from a slender tapering rock pinnacle which was formerly situated a little to the north
(i.e. on the Alum Bay side) of the present central rock. This needle-shaped rock, about 120ft high and known as 'Lot's Wife'
collapsed into the sea in 1764 with a crash which was said to have been heard many miles away!
The stump of this pinnacle can still be seen at low water where it forms a dangerous reef.

"The present lighthouse, 109 feet high, clings to the base of the most westerly rock of the Needles group.
It started working on 1 January 1859, taking over from the original lighthouse on the cliff top."