BARONESS THATCHER has revealed that she is “appalled” by Gordon Brown’s handling of the economy, 18 months after he feted her at Downing Street.

She is said by a close confidant to view his response to the economic crisis as a rerun of history, echoing the events of 1976, when James Callaghan’s Labour government had to ask the International Monetary Fund (IMF) for a bailout. Earlier this year David Cameron, the present Tory leader, warned that Britain might need another IMF rescue if Brown continued with his “irresponsible” financial recovery plan.

Thatcher rarely speaks publicly now; her concerns were relayed last week by Lord Lamont, the former chancellor in an interview in the political current affairs magazine Holyrood. “I can tell you exactly how she feels,” he said. “Mrs Thatcher is appalled by the current situation, very concerned about it indeed. I spoke to her very recently and her attitude is: this is how it always ends with Labour.”

Another close friend of Thatcher said the former leader believed Brown had spent beyond Britain’s means. “It’s an absolutely accurate description of every Labour government since the war,” he said. “They have always left office with a huge economic crisis - the public finances in a terrible state and the economy in disarray. She feels strongly about it because she came to power in 1979 after the Callaghan government had to go to the IMF. She sees it as a repeat of history.

“Her general view would be that you have to have prudent economic management,” he continued, “and although Brown has used the word ‘prudence’ ad nauseam, it has only ever been a word, not an action.

“I have talked to her over the past five or six weeks, and her view is exactly what Norman [Lamont] said. This is what always happens. It always ends in disaster when you have a Labour government.”

The Treasury has already forecast that Britain will be borrowing 8% of gross domestic product this financial year, the same proportion as that borrowed by Denis Healey, the Labour chancellor who went to the IMF for a loan in 1976.

Brown, who had previously spent much of his career attacking Thatcher - and even, as a young MP in 1989, published a book entitled Where There Is Greed: Margaret Thatcher and the Betrayal of Britain’s Future - put on a public display of admiration for the baroness in September 2007 when she took up his invitation to visit No 10.

Thatcher’s office declined to comment on the remarks.

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