Ministers believed hundreds of thousands of pounds were being channelled to the National Union of Mineworkers (NUM) from Moscow in 1984.
But even though the union's assets had been sequestered by the courts after its president, Arthur Scargill, refused to allow it to pay a £200,000 fine for contempt, officials admitted there was little they could do to stop the flow of roubles.
Mrs Thatcher was told the best they could hope for was that a NUM courier might be picked up by Customs trying to enter the country with "a suitcase full of bank notes".
Minsters were alerted by MI5 to the Soviet financial lifeline for the miners in early November 1984. A few days later the Soviet news agency TASS reported publicly that £500,000 had been raised to support the strike.
Although the money was supposed to have been donated by Russian miners, the Government had little doubt that the funds could only have been transferred abroad with the approval of the Soviet authorities.
But despite the sequestration order, the Cabinet Secretary Sir Robert Armstrong was forced to admit to Mrs Thatcher there was little UK authorities could do.
"There are no powers which could be used to prevent the transfer of funds from abroad to the National Union of Mineworkers (NUM) or to somebody nominated to receive them on behalf of the NUM in this country," he wrote in a memorandum dated November 5.
"If a representative of the NUM could be detected entering this country with a suitcase full of bank notes, it might be possible to arrange for him to be stopped and searched by Customs."