Britain's Margaret Thatcher, the 'Iron Lady', dead at 87

Former prime minister Margaret Thatcher, the controversial "Iron Lady" who dominated a generation of British politics and won international acclaim for helping to end the Cold War, died following a stroke on Monday. She was 87.

World leaders paid tribute to Britain's only woman premier, whose polarising 11 years in office saw her take on trade unions, go to war in the Falklands and wield her signature handbag against the European Union.

Britain's Queen Elizabeth II said she was saddened by Thatcher's death while Prime Minister David Cameron recalled parliament for a special tribute session, but mining leaders and Irish republicans said she left a disastrous legacy.

"Today we lost a great leader, a great Prime Minister and a great Briton. Margaret Thatcher didn't just lead our country -- she saved our country," said a sombre Cameron, who cut short a trip to Europe and flew back to London after the news of her death broke.

Red white and blue Union flags flew at half mast over Buckingham Palace, the Houses of Parliament and the prime minister's Downing Street official residence, while mourners left flowers outside Thatcher's house.

Britain announced plans for a ceremonial funeral next week of the kind given to Princess Diana, although it is a step short of the full state funeral of the kind accorded to monarchs and World War II premier Winston Churchill.

Wearing a black tie in a sign of mourning, Cameron said in a speech outside Downing Street that "we can't deny that Margaret Thatcher divided opinion" but hailed her "lion-hearted love of this country."

The former Conservative Party leader was the 20th century's longest continuous occupant of Downing Street from 1979 to 1990.

Right-wingers hailed Thatcher as having hauled Britain out of the economic doldrums but the left accused her of dismantling traditional industry and destroying the fabric of society.

The once formidable Thatcher suffered from dementia in recent years -- her illness becoming the subject of a film starring Meryl Streep, who hailed her Monday as a "pioneer for women".

Thatcher was told by doctors to quit public speaking a decade ago after a series of minor strokes. She was last in hospital in December for a minor operation to remove a growth from her bladder.

Her spokesman Lord Tim Bell said she had "died peacefully following a stroke this morning." She was staying at the Ritz Hotel in London when she died, he said.

On the world stage, Thatcher built a close "special relationship" with US president Ronald Reagan which helped bring the curtain down on Soviet Communism. She also fiercely opposed closer political ties with Europe.

President Barack Obama said the United States had lost a "true friend" and Russian president Vladimir Putin hailed her as a "brilliant political figure".

Former Soviet leader Mikhail Gorbachev, whose good relations with Thatcher played a part in ending the Cold War, said she would live on in "memory and in history" while Helmut Kohl, the father of Germany's 1990 reunification, praised her "love of freedom".

German Chancellor Angela Merkel said Thatcher was an "extraordinary leader" while French President Francois Hollande said she left a "profound mark" on Britain.

Britain's 86-year-old queen, who shared weekly chats with Thatcher during her time in power, was "sad to hear the news of the death of Baroness Thatcher," Buckingham Palace said.

Thatcher will receive a ceremonial funeral "with military honours" at St Paul's Cathedral in central London some time next week, although the date has not been confirmed, Downing Street said.

Her coffin will rest in the Houses of Parliament the night before and will be taken through the streets on a gun carriage to the cathedral.

A private cremation would follow later, it said, adding that the arrangements were at the request of Thatcher's family. British newspapers reported that the former premier had herself requested that she did not receive a state funeral, knowing that it would prove divisive.

The House of Commons and House of Lords, the two chambers of parliament, will be recalled on Wednesday so that lawmakers can pay tribute to Thatcher.

Reaction to her death was mixed in Britain.

"It's a crying shame, she's a good woman," said law firm employee Alan Whiteford in London.

But David Hopper, regional secretary of the National Union of Mineworkers (NUM) in northeast England, said few tears would be shed in his industry, one of the hardest hit by Thatcher's policies.

He said: "I'm having a drink to it (her death) right now. It's my 70th birthday today and it's one of the best I've had in my life."

Thatcher was born Margaret Hilda Roberts on October 13, 1925 in the market town of Grantham, eastern England, the daughter of a grocer.

After grammar school and a degree in chemistry at Oxford University, she married businessman Denis in 1951 -- who died in 2003 -- and two years later had twins, Carol and Mark.

She was first elected to the House of Commons in 1959 and succeeded former prime minister Edward Heath as opposition Conservative leader in 1975 before becoming premier four years later.

Her enduring legacy can be summed up as "Thatcherism" -- a set of policies which supporters say promoted personal freedom and broke down the class divisions that had riven Britain for centuries.

Pushing her policies through pitched Thatcher's government into a string of tough battles, while she also had to deal with unexpected setbacks.

When Argentina invaded the remote British territory of the Falkland Islands in 1982, Thatcher dispatched troops and ships, securing victory in two months.

In 1984 Thatcher survived an Irish Republican Army bombing at a hotel in Brighton.

Gerry Adams, leader of the Sinn Fein republican party, said she had played a "shameful role" in the troubles in Northern Ireland.