MARGARET Thatcher was warned that the Government's refusal to mount a substantial rescue package following the closure of the British Aluminium smelter in Invergordon, with the loss of 900 jobs, could spell political "disaster" for the Conservatives in Scotland.

George Younger, the Scottish Secretary, told the Prime Minister: "The results of this are serious for the Highlands economically; politically, they could be disastrous for us."

The letter went on: "As I feared, this closure has provoked a degree of bitterness unparalleled even in Scotland. The Highlands have had more than their fair share of disasters over the generations and no doubt this helps to account for some of the intensity of feeling."

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He added: "We're going to be regarded as the Government that lost the two major projects brought to the Highlands as a result of Government policy in recent years."

Handwritten notes in the margins of the documents showed how Whitehall officials were aware that Sir George was trying to put together an improved rescue package for British Aluminium, yet there was very little political support from No 10.

Asked in a note if there would be any point in proceeding with the Scottish Secretary's rescue plan, the PM bluntly replied: "I do not think there would."

The Invergordon smelter never opened again. In 1982, there were 22 Scottish Tory MPs at Westminster; today, there is just one.