Born into the Labour aristocracy, the daughter of Lord Callaghan, she was once the wife of an ambassador and is known as "Posh Spice" in the House of Lords because of her impeccable connections and formidable talent for networking.
The irony is that while she has reached the top echelon of power, her former husband Peter Jay has never fulfilled Time magazine's prediction that he would become a world leader.
He is now Economics and Business Editor at the BBC, while Margaret has blazed her way through politics to become a key member of the Prime Minister's trusted inner circle.
The Oxford graduates married in 1961 at the House of Commons and were feted as the best connected "golden couple" of their generation.
Their union was a dynastic alliance of brilliant left-wing families, littered with establishment figures, and was sealed with Peter's appointment as British ambassador to Washington. However, the relationship crumbled when Margaret had an affair with Watergate journalist Carl Bernstein, which had the whole of Washington society awash with gossip.
A film telling the story of their affair, Heartburn, starring Jack Nicholson and Meryl Streep, was seen as a public gesture of revenge by Bernstein's wife, Nora Ephron, who wrote the screenplay.
The Amazonian politician has always attracted high-profile lovers at the top of their professions. After Bernstein, she had a passionate affair with Professor Robert Neild, a leading Cambridge academic and former Treasury advisor, and she is now married to the eminent Aids specialist Professor Michael Adler.
Her diverse circle of friends, acquired from her time as a BBC reporter and politician, includes Jonathan Dimbleby and his writer wife Bel Mooney, as well as BBC director-general Sir John Birt and Cherie Blair.
However, they say she is the antithesis of a stuffy politician and is never pompous about her connections.
Baroness Mallalieu, a Queen's Counsel, says Margaret Jay is the ideal person to quell any discord in the House of Lords over Labour reform.
"Some politicians don't have a sense of humour but she has a great sense of fun. Margaret is a discreet gossip and the great thing about her is that she is not the least bit pompous," said Mrs Mallalieu.
"There is no sense of her being an ex-prime minister's daughter. She is ageless and appeals to women and men. She will get on well with the other side, which is essential if there is going to be co-operation in the House of Lords."
Rabbi Julia Neuberger, who has been a friend for many years, says it is Margaret Jay's human side which makes her so popular. "I think she will do her job with great distinction. She has an amazing amount of human warmth and is a very loyal friend," she said.
"Margaret is the sort of person who will take the time to cook you a meal even when you know she is busy. She is someone who cares and I think her warmth will endear her to people in her new job."