Baroness Thatcher

Margaret Thatcher, who has died after a stroke at the age of 87, was Britain's first woman Prime Minister and dominated British politics in the last two decades of the 20th century.

Not only was she Prime Minister for the whole of the 1980s, but her legacy has continued to overshadow her successors through the 1990s and into the present century.

Her objective on becoming Conservative leader in February 1975 was to reverse the tide of collectivism which had been advancing under Tory and Labour governments since 1945, and eliminate what she called socialism from British public life.

During her 11 years at No 10 she not only returned most nationalised sectors of the economy to private ownership, curtailed the power of the unions and replaced the corporatist culture of subsidies and incomes policies with a much greater trust in market forces to stimulate enterprise, but she dragged the opposition parties with her.

She did not achieve all this by herself. She was the British reflection of a global phenomenon, driven by a combination of new technology and the manifest failure of socialism, which swept the world from China to Peru, culminating after 1989 in the collapse of communism in the Soviet Union.

She articulated it with clarity and courage, and drove it forward with such single-minded energy that Britain led the way in several areas, notably privatisation, and became the international symbol of resurgent capitalism on both sides of the former Iron Curtain – more admired around the world than at home.

Her other, more personal achievement was to have become Prime Minister in the first place: not just Britain's first woman Prime Minister but the first to lead any Western democracy and one of the first to reach the top by her own efforts, rather than as the widow or daughter of a former leader. This was a triumph of single-minded ambition, pursued with exceptional determination from an early age.

Margaret Roberts was the second daughter of a grocer who was a Methodist lay preacher and a long-serving town councillor in the small industrial/market town of Grantham in Lincolnshire. From her father she derived the habit of hard work, the ambition to go into politics and a strong moral sense, shading into self-righteousness; from her mother the skills of a meticulous housewife.

She chafed at the restrictions of her thrifty childhood and longed for a bigger stage. She won a scholarship to the local girls' grammar school and then a place at Oxford, where she read chemistry and was president of the Conservative Association. She worked briefly as an industrial chemist – in Essex, then in London – before winning selection as Conservative candidate in the safe Labour seat of Dartford, Kent, in the 1950 and 1951 general elections. As the youngest Tory candidate in the country she attracted a lot of attention, and never looked back.

In Dartford she met and married Denis Thatcher, a divorced paint manufacturer 10 years her senior, who provided the domestic stability and financial security which underpinned her career. She did not allow the birth of twins – Mark and Carol – in 1953 to interrupt her career but immediately read for the Bar and practised as a tax lawyer before winning, at her fourth attempt, selection for the safe Tory seat of Finchley, north London, in 1958.

To have persuaded a Conservative selection committee in the 1950s to choose the mother of five-year-old twins as their MP was astonishing enough; just three years later she smashed another glass ceiling by becoming the first mother of young children to become a Minister. Long before she became Prime Minister, she was already blazing a trail not just for women in politics but for all professional women who today routinely juggle children with careers.

What became normal in the 1980s – hiring a nanny and going back to work – was unheard of in the 1950s, and it is remarkable that Denis Thatcher, a conventional husband, allowed his wife to do it.

In 1967 she became the token woman in Ted Heath's Shadow Cabinet, and in 1970 Secretary of State for Education. This was an accepted "woman's job". Her ambition and ability were underestimated.

After Mr Heath's second defeat in October 1974, when an unpredictable combination of circumstances ruled out all the better qualified candidates, she had the courage and confidence to seize her opportunity: she defeated Mr Heath and was elected – to amazement – Tory leader in February 1975.

She endured a difficult four years as Leader of the Opposition, and might never have made it to Downing Street if James Callaghan had gone to the country in 1978. The industrial chaos of the winter of discontent discredited the Labour Government and she became Prime Minister, with a comfortable majority, in May 1979. The first three years were a desperate time. The Conservatives campaigned on the slogan: "Labour isn't working" and made their priority the control of inflation. But the attempt to apply monetarist policies in the middle of a recession increased unemployment and inflation. Much of Britain's manufacturing industry was destroyed, unemployment rose to more than three million and there were riots in English cities.

Along with her Chancellor, Geoffrey Howe, she stuck to her guns, famously insisting: "The lady's not for turning", but was soon the most unpopular Prime Minister since polling began. Salvation came from the South Atlantic. The Argentine invasion of the Falkland Islands in 1982 could have finished her, but the courage of her response and successful reconquest of the islands by British forces wrested from the crisis a military and political triumph which epitomised her best qualities and gave her an aura of invincibility.

At the same time the economy emerged leaner but fitter from the recession, and in 1983 she was re-elected with a landslide majority over Labour and the new SDP-Liberal Alliance which 18 months earlier had threatened to sweep her away.

The second term (1983-87) was marked by bruising conflicts. The year-long miners' strike, accompanied by scenes of horrifying violence and bitter social division, sealed the Government's defeat of trade union power. Another protracted battle to abolish the Greater London Council and other English metropolitan counties achieved a crude but effective purge of left-wing influence in local government.

A Cabinet crisis over the future of Westland helicopters, which resulted in the resignation of Michael Heseltine and the sacrifice of Leon Brittan, temporarily damaged her authority. She was lucky to escape injury when the IRA bombed the Conservatives' conference hotel in Brighton.

Through all these distractions the economy boomed, the privatisation of British Telecom, British Gas and other nationalised utilities proved popular and Nigel Lawson kept on cutting taxes. As a result the Government was re-elected in 1987 with its majority barely dented. At this point it looked as if she could be Prime Minister for life.

The third term opened with a hectic programme of social reform, in education and the NHS, plus further privatisation.

It all began to go wrong from 1988. The Lawson boom collapsed following the 1987 stock market crash, leading to the return of inflation and high interest rates which hit new middle-class homeowners who had done so well in the previous five years. The disastrously ill-judged poll tax – introduced first in Scotland in 1989, then to England and Wales the following year – provoked an enormous wave of protest and refusal to pay. And her increasingly autocratic style, which led to the resignations of Mr Lawson and Mr Howe, exasperated by her ever more strident opposition to European integration, did not help.

When Mr Heseltine challenged her leadership in November 1990, 152 Tory MPs supported him. Though she won 204 votes she was forced to resign when most of the Cabinet advised her she would not win a second ballot. This was a brutal end to the longest and most commanding premiership of modern times, and an act of regicide from which the Tory party took a long time to recover. She invited it by her own disloyalty to colleagues, intolerance of dissent and refusal to contemplate retirement.

Though she led the most ideologically driven Government since 1945-51, and tapped the ideas of an unusually wide range of outside advisers, she was not an intellectual. She drew her strength from an exceptionally clear but narrow moral sense which enabled her to articulate radical goals with persuasive simplicity.

She was more cautious than her evangelical rhetoric suggested. Until the poll tax she was careful never to get too far ahead of public opinion: her great skill was to take the public with her (at least enough to win elections against a divided opposition: she never won the support of more than 43% of the electorate).

Thoroughly middle-class in outlook, with little understanding of people of different background and attitudes, she was a brilliant populist. Voters – including a lot of working-class and former Labour voters – admired her courage, forthrightness and strength, even though they did not warm to her personality. It was the educated intelligentsia who loathed her.

Though she professed a theoretical admiration for Scotland as a land of thrift and rugged enterprise inspired by Adam Smith, she was an instinctive Unionist who had no regard for Scottish separatist traditions. She was essentially an English nationalist whose geopolitical outlook was forged by the Second World War, from which she retained a lifelong contempt for the continental Europeans and undying gratitude to the US.

Through her close personal bond with Ronald Reagan she made a reality of the Anglo-American special relationship; and acted as a bridge between the Americans and Mikhail Gorbachev which enabled her to play a significant if subordinate part in the ending of the Cold War.

For a few years she did punch above Britain's real weight in the world. But at the same time her visceral hostility to Europe damaged Britain's most important international relationship.

She had a powerfully divisive effect on British politics and society. The deregulated economy became stronger and more competitive; wealth was created, but the benefit was not shared equally. A high level of long-term unemployment persisted throughout the 1980s and she ignored the evidence of inequality – rising homelessness and the appearance of beggars in the streets – with callous equanimity.

Freedom, in her view, involved winners and losers. The priority given to tax cuts and personal consumption left an enduring legacy of chronic under-investment in public services: private affluence undercut by public squalor. Her aggressive style of conviction politics, which treated not just the Labour Party and the unions, but civil institutions such as the churches, the BBC, the civil service and the universities equally as "enemies within", irreparably damaged the previously bipartisan fabric of public life.

Likewise by marginalising Parliament and Cabinet and governing increasingly through unelected advisers and the manipulation of a largely sycophantic press, she went far to establish the presidential style of government which has been developed further by Tony Blair. She all but destroyed local government in England and Wales; yet ironically by her assertive Englishness she unwittingly gave an enormous boost to the demand for Scottish devolution.

For better or worse, Margaret Thatcher between 1979 and 1990 transformed Britain. We are still living today in the society and the political landscape she created.

She is survived by her two children.