BARONESS Thatcher was "misunderstood" when she suggested there was no such thing as society, Richard Chartres, the Bishop of London, said in his sermon.

The late prime minister caused controversy when in 1987 she told Women's Own magazine: "They are casting their problems at society. And, you know, there's no such thing as society. There are individual men and women and there are families. And no government can do anything except through people and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours."

The bishop's sermon looked at a lecture in which Lady Thatcher referred to Christian doctrine that "we are all members of one another, expressed in the concept of the Church on earth as the body of Christ".

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In her lecture, she went on: "From this we learn our interdependence and the great truth that we do not achieve happiness or salvation in isolation from each other but as members of society."

The bishop said Lady Thatcher was aware that there were "prior dispositions", needed to make market economics work and democratic institutions work well and that these were given power by people's relationships.

"In her words – 'the basic ties of the family are at the heart of our society'," he said.

He added: "Her later remark about there being no such thing as society has been misunderstood and refers, in her mind, to some impersonal entity to which we are tempted to surrender our independence."