London: Former British prime minister Margaret Thatcher, the "Iron Lady" who shaped a generation of British politics, died following a stroke on Monday at the age of 87, her spokesman said.
"It is with great sadness that Mark and Carol Thatcher announced that their mother Baroness Thatcher died peacefully following a stroke this morning," Lord Tim Bell said, referring to Thatcher's children.
Britain's Queen Elizabeth II was saddened to hear of her death, Buckingham Palace said.
"The Queen was sad to hear the news of the death of Baroness Thatcher. Her Majesty will be sending a private message of sympathy to the family," it said.
The former prime minister, who led Britain from 1979 to 1990, suffered from dementia and has appeared rarely in public in recent years.
She was last in hospital in December for a minor operation to remove a growth from her bladder.
The former Conservative Party leader remains the only female prime minister in British history and was the 20th century's longest continuous occupant of Downing Street.
Her daughter once revealed that the former premier had to be repeatedly reminded that her husband Denis had died in 2003.
She was told by doctors to quit public speaking a decade ago after a series of minor strokes.
Michael Howard, Conservative leader 2003-2005, told Sky News television: "It's terribly sad news. She was a titan in British politics.
"I believe she saved the country, she transformed our economy and I believe she will go down in history as one of our very greatest prime ministers."
Right-wingers hailed her as having hauled Britain out of the economic doldrums but the left accused her of dismantling traditional industry, claiming her reforms helped unpick the fabric of society.
On the world stage, she built a close "special relationship" with US president Ronald Reagan which helped bring the curtain down on Soviet Communism. She also fiercely opposed closer ties with Europe.
Prime Minister David Cameron said in a statement: "We have lost a great leader, a great prime minister and a great Briton."
Margaret Thatcher's life in politics
Margaret Thatcher's first foray into politics was in 1950 when she was defeated in her attempt to unseat a popular MP for Dartfort.
She lost but won plaudits for her dignity and her speeches espousing pure Conservative values of tight fiscal polices and family first.
For the next nine years, she did put her family first – marrying Dennis Thatcher and focusing on her twins, Mark and Carol. She found time to become a barrister – but the draw of politics was too strong.
Her election in 1959 as MP for Finchley began a four-decade long crusade to impose her values on the nation.
As Education Secretary, she famously abolished free milk to all schoolchildren – earning her the tabloid headline “Thatcher the Snatcher”.
Banished to opposition in the 1974 general election, she became a central figure in rebuilding the party. She challenged Heath for the party leadership and won, setting the stage for her eventual entry into 10 Downing Street.
That came in May, 1979 at a time where unions dominated the economic agenda, inflation was rampant, and there was no end to the violence in Northern Ireland.
In 1984, she survived a IRA bombing of her hotel in Brighton as the Conservative Party met. She was in an adjacent room when the bomb went off.
In her third term, she changed local taxation, introducing a poll tax, imposing levies on the number of individuals living in a home, not on the home itself.
By Mick O'Reilly, Senior Associate Editor