Her comments, coming at a delicate stage in the search for a settlement, are likely to anger Downing Street. John Major has so far refused to be drawn in public on the question of an amnesty.
The former prime minister told friends that she would back John Major if he agreed to peace talks with Sinn Fein, the political wing of the Provisional IRA, in the event of a sustained ceasefire and the surrender of weapons.
But Lady Thatcher said - in 'quite specific and emotional terms', according to friends - that she ruled out the wholesale freeing of convicted bombers and killers. These would include her would-be assassin Patrick Magee who is serving a prison sentence of 'at least 35 years' for planting the Brighton bomb in October 1984, which killed five people.
Yesterday, John Hume, leader of the Social Democratic and Labour Party, and Gerry Adams, president of Sinn Fein, disclosed that they had had a fresh round of talks to discuss the British and Irish governments' responses to their proposals. They are convinced their initiative could lead to a political settlement in Ireland.
But Mr Major poured cold water on their optimism after what he said was a very friendly 15-minute telephone conversation from his Huntingdon constituency with the Irish prime minister, Albert Reynolds.
Downing Street sources made clear there was no question of Britain or the Republic adopting or endorsing the outcome of the talks between Mr Hume and Adams. The sources said: 'Any proposals which come from only one side of the community or which do not fully take into account all the interests of both sides are fatally flawed.
'Nor can there be any suggestion of negotiating terms with Sinn Fein. There is only one message which the Government and the people of Northern Ireland want to hear from the IRA: that the IRA are going to cease violence for good.
'As the Prime Minister has said repeatedly, that would open the way for Sinn Fein to enter the political arena after a sufficient interval. But any other message or statement is simply an attempt to evade this central proposition. No one should encourage Sinn Fein to evade it.'
Reports are circulating in Westminster that a second document in the Hume-Adams talks concedes that the question of IRA and loyalist prisoners will have to be addressed in
any comprehensive peace settlement.
The IRA regards members of its 'active service units' held in British and Ulster jails as prisoners of war. It will demand that they are released if hostilities are formally ended. Downing Street said it had seen no specific proposals.
Lady Thatcher's comments come amid increased tension between London and Dublin following the leak on Friday of a draft Irish plan for the peace process. That spilled over into new uncertainty over the date of the forthcoming Anglo-Irish summit. An Irish official said last week that it would be on 3 December but Downing Street said it might be 'a little bit later than that'.
The former premier, who is on a 10-day tour of the Far East, may go public with her views if the House of Lords debates the issue soon. After her critical public comments about government policy on Bosnia, and her involvement behind the scenes in the pit closures debacle, that would be seen in Downing Street as further unwelcome interference. However, she has been careful not to criticise her successor during his present attempts to achieve peace in Northern Ireland.
On 1 November in the Commons, Norman Lamont, the former Chancellor, asked for a categoric assurance 'that there is no question of an amnesty for terrorists'. The Prime Minister side-stepped the question, arguing: 'There are no political prisoners anywhere in the United Kingdom, so the question of amnesties does not arise in any way.'
The leak of Dublin government thinking on Ulster's future overshadowed hopes of forcing an early breakthrough towards peace.
The leaked proposal envisages the Republic dropping its constitutional claim to the territory of Ulster in return for Whitehall recognition that eventual Irish unity is a legitimate goal.
It was emphasised in Dublin that the 30-point scheme was one of several being drafted by both the British and Irish governments for consideration and had not been examined by the Irish cabinet. But the position set out in the paper is thought close to Dublin's likely official negotiating stance.
James Molyneaux profile, page 19
(Photograph omitted)Reuse content