Thatcher 'spied on Lawson': Colin Brown reports on a TV series about the former prime minister's years at No 10

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BARONESS THATCHER is accused of 'paranoia' by Lord Lawson, her former Chancellor, in a television documentary series which begins tonight. In the series on her 11 1/2 years in power, Lord Lawson alleges that the former prime minister 'spied' on his handling of the economy.

There were also rumours, unsubstantiated by Lord Lawson, that 11 Downing Street, the Chancellor's residence, may have been bugged by No 10 during the most turbulent period in the mid-Eighties, when Lady Thatcher was resisting his pressure to join the European exchange rate mechanism.

The BBC 1 series, Thatcher: The Downing Street Years, over which she had no editorial control, will cast doubt on the account Lady Thatcher gives of her own period of office in her memoirs, and seriously questions her judgement over key areas of policy.

The series will also give John Major the first opportunity to reply to her allegations that he vacillated over her decision to fight on for the leadership after failing to win outright victory against Michael Heseltine, and her criticism of him as a consensus politician more interested in party unity than principle.

The Prime Minister has agreed to be interviewed for the series. European heads of government were also approached, including Helmut Kohl, Francois Mitterrand and Jacques Delors, president of the European Commission, but all refused.

The programme-maker, Fine Art Productions, heard reports from some visitors to No 11 of fears of being overheard by eavesdroppers. However, Lord Lawson dismissed the suggestions and said he would have taken them up with Lady Thatcher if he had believed No 11 was bugged. But the former chancellor confirms Lady Thatcher rang up officials at the Bank of England as part of her intelligence gathering to check on his conduct of exchange rate policy.

'She was slightly paranoid by that time and was, I think, afraid I might be up to something she didn't know about. In fact, that was never the case . . . Although we had a disagreement on exchange rate policy, that was always entirely open. I was always completely open with her throughout my time as Chancellor . . . The way her mistrust of me manifested itself most was in her readiness to talk to the press in somewhat dismissive terms as far as I was concerned about the policies I was pursuing, and her failure to feel any obligation to show a united front in the House of Commons or in public generally.'

Lady Thatcher hints at the alleged spying on her former Chancellor in her memoirs. She claims he kept her in the dark about his decision from March 1987 for sterling to shadow the Deutschmark. When she learnt the truth, she said: 'How could I possibly trust him again? . . . I did not want to raise this matter with Nigel until I was absolutely sure of my ground. So I brought together as much information as I could about what had been happening to sterling and the extent of intervention. Then I tackled him.'

But in the television series, at 9.30pm, Lord Lawson refutes her allegations that she was not told. He insists she was kept informed. 'Not only is it absurd to suggest that I could have carried out that policy secretly when everbody in the markets - let alone the Prime Minister - knew it was being carried out, she was given every day a piece of paper which showed how much we had intervened . . . and I discussed it with her every week.'