Moment that sank hopes of Falklands peace deal

The attack on Argentina's warship'General Belgrano' was pivotal, says Colin Brown and Kim Sengupta

It was the moment which came to define the Falklands conflict, claiming more than 300 lives and setting in chain events which would lead to the invasion of the disputed islands by British troops.

Now, as services are held to mark the 30th anniversary of the start of the war, a leading member of Margaret Thatcher's War Cabinet has revealed details of how intelligence received directly from the Chilean regime of fascist dictator Augusto Pinochet led to the controversial decision to sink the Argentine warship General Belgrano.

The sinking of the former US warship was highly controversial, because at the time it was outside a British 200-mile Total Exclusion Zone around the Falklands and was steaming away from the UK Task Force. The light cruiser went down with the loss of 323 lives.

In an exclusive interview for a forthcoming book on the history of Britain, Real Britannia, Lord Parkinson discloses that the War Cabinet took the decision after receiving secret intercepts from Chilean intelligence services revealing the orders from the Argentine junta to the warship's captain, Hector Bonzo. Lord Parkinson, one of Lady Thatcher's closest allies, said: "They [Chile] had intercepted the Argentinian command's instructions so we knew what their instructions were... We had been discussing what would we do if we found it [the Belgrano] because we knew – because the Chileans were intercepting the orders – the Belgrano was out to sink a carrier. The fact that it was going one way or the other, it was manoeuvring to avoid a torpedo."

i has learned from defence sources that the Chilean information also showed that the staff of Admiral Jorge Anaya, the head of the Argentine Navy, had been directing orders to the Belgrano and a destroyer, the Hippolito Bouchard, to continue engaging in combat while taking all measures necessary to avoid coming under attack.

This was interpreted by the British high command as signifying that movement towards her home port by the two ships may well have been acts of subterfuge. The sinking took place 14 hours after the President of Peru, Fernando Belaunde, proposed a comprehensive peace plan which included regional states playing a role. After the sinking, Argentina rejected the plan but the UK indicated its acceptance on 5 May. The news was dominated by military action and it is not well known that the British continued to offer ceasefire terms until 1 June.

The War Cabinet, of which Lord Parkinson was an influential member, took the decision to sink the Belgrano on 2 May 1982, after being briefed at a meeting at Chequers with Mrs Thatcher and Sir Terence Lewin, Admiral of the Fleet.

Lewin told the War Cabinet that Commander Chris Wreford-Brown, the captain of British nuclear submarine Conqueror, had the Belgrano in his sights and was seeking permission to attack. The ship was part of a small battle group, flanked by two Argentinian destroyers equipped with sea-skimming Exocet missiles.

The War Cabinet authorised Lewin to proceed. The order was flashed through Northwood, the Navy's command centre in West London, to the Conqueror. Wreford-Brown fired two non-guided torpedoes, which blew off the ship's bow.

Lord Parkinson said: "We discussed the Belgrano ad nauseam and what it was up to. Then up comes the Captain and says the Belgrano is going into shallower water and I can't follow it.

"These things are bloody enormous. Something as big as a nuclear submarine in shallow water was easy to hit. You couldn't allow that risk."

Pictures taken by survivors of the warship listing to port, before sinking, with orange rafts floating nearby, became one of the lasting images of the war, prompting the notorious Sun headline: "Gotcha!"

Protests about the action were led by Tam Dalyell, the former Labour MP, who claimed the sinking had been ordered for political reasons by Lady Thatcher to destroy the last hopes of a peace plan being pursued in Peru by Perez de Cuellar, the Peruvian Secretary General of the UN, and Al Haig, the US Secretary of State. But Lord Parkinson denied this. "It was nothing to do with that. It was unanimous that if we had let the Belgrano go and it had sunk a carrier, we would all have been finished. We would all have had to stand down, if we had presided over the death of hundreds of British sailors and had the chance to avert it."

Lord Parkinson also dispelled one of the great myths of the war, that Britain relied heavily on surveillance from US satellites. The system was so slow that the US only supplied the photographs of the Argentine navy back in port the day after the conflict ended.

His disclosure that Britain received vital intelligence reports directly from Chile explains why Lady Thatcher supported General Pinochet when he was arrested in Britain for alleged war crimes, when he later came for treatment in a private London clinic. She said at the time that Britain owed a debt of gratitude to the Chilean leader for helping it win the war.

'Real Britannia, Britain's Proudest Years – The Glory and The Spin' by Colin Brown will be published in October by Oneworld Publications