

British PM's lucky gamble not only repelled the Argentinian invasion but also paved way for her ideological reforms
Argentinian soldiers, Falkland Islands, 1982
Argentinian soldiers newly arrived on the Falkland Islands in April 1982, after the capture of Port Stanley. Photograph: Manchester Daily Express/SSPL/Getty

Thirty years ago on 2 April 1982, 130 Argentinian commandos landed under cover of darkness on the British Falkland Islands in the South Atlantic, 1,100 miles from Buenos Aires. They seized the airfield, the marine barracks and, after a brief firefight, government house. This was followed by a full infantry landing in the harbour of Port Stanley.

By 8.30am, the islands were no longer British. Argentina's new junta, under General Leopoldo Galtieri, had truly marked the 150th anniversary of the island's occupation by Britain in 1832, while rescuing itself from opposition riots in Buenos Aires. It felt entitled to the islands, and thought the world, notably the United States, would agree with it, as it had India's similar seizure of Portuguese Goa in 1961.

To Margaret Thatcher, as she awoke that morning, the news was devastating. Two days of intelligence had suggested an Argentinian fleet was closing on the islands. A submarine had been sent, but it would take two weeks to arrive, and leaked news of its despatch merely speeded the invasion. She had telephoned her friend, President Ronald Reagan, to intercede. But Reagan found Galtieri drunk and intransigent.

After fewer than three years in office, Thatcher had achieved little beyond tax cuts for the rich and spending cuts for the poor. Cabinet colleagues were in open revolt and the new Social Democrats were experiencing the strongest third party surge in half a century.

Now this. British territory had been invaded by a foreign army on her watch. Captain Barker of HMS Endurance, the one British warship in the vicinity, radioed: "This has been a humiliating day." Thatcher had to face her cabinet that morning and parliament the following day, "The worst I ever had." The government's official history of the war acknowledged that she faced possible resignation.

To the 21st century, the Falklands can seem a late-imperial curiosity. The idea of British troops fighting so far from home seemed odder at the time than it might in today's age of wars. Many Argentinians claimed that Thatcher "had drawn Galtieri on to the punch" to save her own political skin. The failure to send any warning ultimatum to Buenos Aires certainly puzzled historians.

In truth, Thatcher was in shock. The invasion had clearly been precipitated by her defence review, phasing out the navy's "out-of-area" capability and withdrawing HMS Endurance, the South Atlantic patrol vessel. A possible transfer and leaseback of the islands to Argentina was being discussed at the United Nations in New York, and it was only the collapse of these talks that precipitated the junta's reviving a long dormant invasion plan.

Thatcher had one shot in her locker. Two evenings before, as evidence emerged of an impending invasion, she had summoned a meeting of foreign and defence ministers in her Commons room to discuss a possible response. The session was plunged in gloom. The Foreign Office was in despair, having long pleaded that a cessation of negotiations should mean "fortress Falklands". But to be proved right was no joy.

Meanwhile, a defence paper from the secretary of state, John Nott, indicated the vulnerability of the islands, and the near impossibility of recapturing them if taken. Both the foreign secretary, Lord Carrington, and the chief of the defence staff, Lord Lewin, were out of the country. Had they been present, they, too, would have counselled extreme caution and an emphasis on diplomacy.

Then something extraordinary happened. In a moment of theatre, later acknowledged by all present, the mood was transformed when the meeting was gatecrashed by the head of the navy, Admiral Sir Henry Leach. He was in the midst of a furious battle with Nott over navy cuts, and had heard that Nott was at a Commons meeting with Thatcher.

Asked by Thatcher if he thought a task force to recapture the islands was feasible, he said he could sail one within 48 hours. Asked what his response would be, were he the Argentinian general, he said: "I would return to port immediately." It was a reckless and self-serving remark.

Leach's gung-ho approach appealed to Thatcher's decisive style. More to the point, it was a straw at which she could grab in total darkness. Cabinet on the morning of 2 April heard that Rex Hunt, the Falklands governor, had surrendered and the British marines had been expelled from the islands.

The following day saw the most toxic press Thatcher had received. The government had been caught napping by a tinpot dictator. The Times demanded that Lord Carrington "do his duty" and resign. The Express demanded all of "Thatcher's guilty men" should go.

In her speech to parliament on Saturday 3 April, the first weekend debate since the second world war, Thatcher dared not even promise the re-establishment of British rule on the Falklands, carefully using the words "British administration of the islands". But she had the task force to brandish over the dispatch box. With Labour's normally un-jingoistic leader, Michael Foot, bellowing for "action not words", she pleaded for support for troops which, as yet, were still on British soil.

Attention now turned to Leach's navy. He had raced from the Wednesday meeting with a message to every ship he could find "to make ready to sail in 48 hours". Pandemonium broke out in Portsmouth and Plymouth. Sailors and marines were summoned from every corner of the land. An incredulous marine commander, General Jeremy Moore, was awakened at 3am and told to go and recapture the Falklands.

Plymouth public library was plundered for books on the South Atlantic. Supply trucks poured all night through the streets of Portsmouth and Plymouth. In a scene recalling Dunkirk, some 50 civilian ships were requisitioned for supplies. Leach was terrified the cabinet would get cold feet and rescind the task force.

What came to be called Operation Corporate ran close to disaster. A thousand men died, 255 of them British. Had more of the Argentinian bombs that landed on British ships exploded – their timers were faulty – a successful land campaign would have been near impossible. As it was, the task force's entire helicopter lift went down with the SS Atlantic Conveyor. This followed the controversial sinking of the Argentinian cruiser, Belgrano, when there was a real danger of stalemate and the humiliation of an American rescue in the offing. Thatcher was exceptionally lucky.

For all its apparent eccentricity, the result of the Falklands war is hard to exaggerate. Britain still lay under a cloud of 1970s failure, culminating in the tough Geoffrey Howe budgets of 1980 and 1981. The economy lagged behind Germany, France and Italy, and the political mood was exhausted and defeatist. Even the victory in the South Atlantic on 14 June was greeted not with ecstasy but as a job well done. At least Britain could fight a tidy war to an emphatic conclusion.

Yet the impact on Thatcher personally was stunning. Previously, she had little public profile at home or abroad. The war had shown her a dominant presence. Her language, her decisiveness, her determination were its watchwords. Afterwards, she was a world celebrity and a changed leader.

Cabinet critics were wholly silenced. A suddenly confident Thatcher felt licensed to push forward with what came to be known as Thatcherism. Constantly citing "the Falklands spirit", she tackled the miners and industrial relations generally. She took on the IRA at great personal cost. She savaged the GLC. She embarked on privatisation, of which she had previously been a sceptic.

The war had other, more lasting consequences. A prime factor in the Argentinian invasion had been Nott's defence review – with Thatcher's concurrence – reducing the navy to a coastal defence and deterrence force. While a vigorous opponent of communism as "the iron lady", Thatcher had shown no interest in foreign affairs and conceded post-imperial retreat in both Hong Kong and Rhodesia. The Falklands changed that, for her and her successors.

It also played into the hands of the true winner, Leach's navy. The one operation future defence strategists desperately wanted to rule out – a contested amphibious landing far from home – had been fought and won. Woe betide any cut that rendered its repeat impossible. Since then, defence spending has had to cover a "Falklands eventuality".

Navy and air force requirements were protected and the army cut. The Falklands led to an extravagant new carrier programme, resisted by the Treasury since the 1960s. The navy also secured a new amphibious assault capability. To every cut came the refrain, "But could we retake the Falklands?" The £3bn cost of the war was nothing compared with the cost of its consequence.

The Falklands ended a long period of post-imperial decline in British foreign policy. Leaders from Thatcher through John Major, Tony Blair and Gordon Brown to David Cameron, were to become self-styled globalists, "ready to punch above our weight".

A third of a century of overseas peace for British troops ended, and the 1990s began a series of "wars of choice", their intensity and cost growing to this day. While most of Europe beat swords into ploughshares, Britain continued to spend heavily on defence.

Post-war, Argentina was blessed with the advent of democracy, to which it has adhered ever since. Its people never admitted defeat over the Falklands and never will; they have all the Americas on their side. Meanwhile, it is a brave British politician who even breathes the word negotiation. As so often in war, nothing was resolved.

• This article was amended on 2 April 2012. The original said that the Argentine sinking of the SS Atlantic Conveyor "explained the controversial sinking" [by Britain] of the Argentinian cruiser, Belgrano. The Belgrano sinking came first. The passage has been corrected to read that the Atlantic Conveyor's sinking "followed the controversial sinking" of the Belgrano.

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