MRS Thatcher's changes to the economic structure were a "good thing" and a wider range of public assets should be privatised, according to the Scottish Labour leader's chief of staff.

Speaking at last year's Tory conference, John McTernan also said his complaint about the UK's only female Prime Minister was that she "didn't sell" her reforms to the country.

McTernan was a special adviser for former Labour First Minister Henry McLeish before working for Tony Blair in Downing Street and then as an aide to Jim Murphy when he was Secretary for State for Scotland.

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After Labour lost power to the Tories in 2010, he moved to Australia and was head of communications in Julia Gillard's administration.

When Murphy succeeded Johann Lamont as Scottish Labour leader last year, McTernan was appointed chief of staff, a post that is believed to attract a salary of over £80,000.

However, footage of McTernan speaking at a Police Exchange event at the Conservative conference in Manchester - months before he joined Murphy's team - appears to jar with the centre-left positions taken by Murphy.

On Thatcher, whose economic policies made her a hate figure in the Labour party, he told delegates:

"She changed the economic structure of the country for good. As in forever. But also for good. It's a good thing she did what she did."

His said Thatcher, whose policies led to unemployment and swathes of British industry being closed, did not "sell what she was doing" and left a "pretty economically illiterate country".

He also said he was a supporter of privatisation: "There's a far wider range of assets that are currently owned by the government which I would privatise. I would have privatised the Underground if I could have done."

McTernan also criticised MPs for their apparent lack of understanding of business: "When they get private sector companies who are providing public services, they hunt them down and say 'but you are making are a profit', as if profit is something stolen from the public."

His comments confirm previous statements on the role of the private sector in delivering public services.

In the past, he has described railway privatisation as "one of the unalloyed triumphs of the [John] Major government", and hailed private provision in the NHS.

A senior Scottish Conservative source said: "These comments are a statement of the obvious. It may not be popular to say in certain circles in Scotland, but it is just a fact Mrs Thatcher changed things for good.

"Its also a fact that for the thousands of Scots who bought their council house or who benefited from Britain's economic recovery, her policies changed the country for the better."

"These are the facts and it is always good to see them acknowledged."

SNP MSP Kenneth Gibson MSP said: "John McTernan is the most senior Labour staff member in Scotland, and him sucking up to the Tories and praising the destructive politics of Margaret Thatcher is a hammer blow to Jim Murphy and another huge embarrassment to the Labour leadership in Scotland.

"Mr McTernan is Jim Murphy's Chief of Staff - he handpicked him - so he must answer for him and explain his pro-privatisation, pro-Tory agenda."

A Scottish Labour spokesperson said: "He was at Tory conference, talking to Tories about Margaret Thatcher - what did you think he would say?"