Thatcher lambasts Blair's return to 'irresponsible' tax and spend

Baroness Thatcher used what is probably her last address to a large audience yesterday to attack the Labour government's "reversion" to "irresponsible policies of tax and spend".

The star turn at the Institute of Directors annual convention, the former prime minister addressed delegates via a pre-recorded interview and then made a personal appearance on stage, to a standing ovation. Lady Thatcher, 77, who has heart trouble, has been told by doctors not to do any public speaking.

In the video, shown at the Royal Albert Hall, Lady Thatcher warned: "Britain is now moving in the wrong direction towards the failed European model and high spending, high taxing and high regulation. I am very concerned for the country's future if those trends continue."

Andrew Main Wilson, the Institute's chief operating officer, who conducted the interview, told members that Lady Thatcher was unlikely to give any more interviews.

Lady Thatcher's principles appeared more strongly held than ever and she was firm and articulate in defending her beliefs. She said: "I have always known what works. Free enterprise works. Limited government works. Encouraging initiative and responsibility works. They go with the grain of human nature, not against it."

Lady Thatcher briefly praised Tony Blair as a "bold and effective war leader" and conceded that "he probably understands that business has to succeed if the country is to prosper". However she added, "that is as far as my approval goes".

She said: "In many respects New Labour shows signs of reverting to Old Labour with its irresponsible policies of tax and spend. Britain just cannot afford this."