The Lady's not for retiring

ONE FIGURE will be eerily omnipresent at the Tory party conference, writes Rachel Sylvester. Margaret Thatcher will hover over William Hague's shoulder throughout the week. Conservative Central Office has stressed that the former prime minister's longer than usual stay in Bournemouth should be interpreted as a sign of loyalty. It has already made sure that a blue Ikea chair should be reserved for her on the conference platform - to save her the indignity of being plonked on a red one.

Yet the Tories' damaging splits on Europe - the key issue with which Mr Hague will be grappling this week - can be traced back to Baroness Thatcher's famous Bruges speech 10 years ago. Her comments that Britain should remain an independent member of the European "family of nations" spawned the Eurosceptic Bruges Group and a host of dining societies hostile to closer integration with the Continent. More recently she sent shockwaves through the party by suggesting that it had virtually no chance of winning the next election.

Most people assume that Lady Thatcher, on the lucrative lecture-tour circuit, is now far removed from the everyday business of Tory politics. In fact, at nearly 73, she remains an extraordinarily powerful figure in the party. Her backing for William Hague during the leadership battle was crucial to his victory - as was her intervention to broker a deal between the Eurosceptic candidates, designed to keep out the pro-European Ken Clarke. When "The Lady", as the party faithful call her, speaks, the troops (MPs and grassroots alike) listen.

And it is on the issue of Europe that she concentrates her attention. Tory Eurosceptics regularly rendezvous at her London home to plot their strategy. Young MPs such as Bernard Jenkin and Iain Duncan Smith often meet her for dinner or drinks to discuss how they can ensure that their party does not veer back towards Brussels.

It was at a meeting more than 18 months ago in Lady Thatcher's office in Chesham Place that the embryonic blueprint for the "no" campaign against the single currency was drawn up. Lady Thatcher is supportive of the Eurosceptic group Business for Sterling. She has also thrown her weight behind Global Britain, a new think-tank run by her friends Lord Pearson of Rannoch and Lord Harris of High Cross. Friends say she believes this organisation, which is planning a magazine and media monitoring unit, will give intellectual backbone to the campaign against Emu.

Lady Thatcher regularly attends gatherings of Tory right-wingers in private dining rooms and Westminster restaurants. Shortly before the summer recess, she urged Eurosceptics at a cocktail party hosted by the Tory MP Sir Peter Tapsell to get their act together. Last month she addressed a private meeting of the Bruges Group in which she said that her original concerns had only been strengthened by subsequent events. Two weeks ago she was the guest of honour at a Tory fund-raising event at the Savoy, organised by the Eurosceptic chairman of Dixons, Sir Stanley Kalms.

Eight years after she moved out of No 10, the Tories still see Lady Thatcher as their spiritual leader. And she finds it equally difficult to let go of them.