The lady is returning – and this time she's staying for good

Baroness Thatcher will return today to 10 Downing Street to unveil a portrait that captures her at the height of her power 27 years ago.

The event marks only the third time a living ex-prime minister has had their painted portrait on display in Downing Street, after David Lloyd George and Winston Churchill.

But instead of the prestigious occasion it was supposed to have been, today's unveiling has become mired in controversy and infighting – while the lady herself, frail and ill, has been a bystander to arguments of others.

It had all been very different when the painting was commissioned from Richard Stone, one of the country's leading portrait artists, who has also painted the Queen, the Queen Mother, and Nelson Mandela.

Then, Gordon Brown, at the peak of his popularity, used a very public invitation to tea at No 10 to tell Lady Thatcher of his plan for the painting, making hay at the expense of David Cameron. She told him she was "honoured" by the idea.

But so much has changed. Mr Brown is up to 20 points behind in the opinion polls and facing a resurgent Tory party and increasingly twitchy Labour backbenchers. While all was going well, courting Lady Thatcher was acclaimed – now she is politically toxic.

And it's beginning to show. When Lady Thatcher was asked who she would like to invite and supplied a list of names, all but one of whom worked with her during her Downing Street years. The odd one out was David Cameron, who was 12 years old when Mrs Thatcher came to power. Someone from Downing Street called back to inquire whether she really wanted this person to be present.

The result was an outcry from the Conservatives, who alleged that a petty-minded Labour Prime Minister was trying to ban Mr Cameron from the event. Downing Street insists there was never a ban, they were simply checking. Mr Cameron will be present at the unveiling at 4pm today. That will be uncomfortable, to say the least, for Mr Brown, who will find himself surrounded by devoted Thatcherites, including some in positions of power when he was a young politics lecturer with an ambition to become an MP.

They include Mrs Thatcher's former press secretary, Bernard Ingham, two former cabinet secretaries, Robin Butler and Robert Armstrong, her former parliamentary secretary Archie Hamilton, and political secretary, John Whittingdale, and her old image advisers, Tim Bell and Maurice Saatchi.

If he was still riding high in the polls it would not be so bad. But instead he will be forced to publicly pay tribute to Lady Thatcher in front of many of those who can now see clearly the moment when they will reclaim the prime minister's residence for themselves. Perhaps it is no surprise then that the Downing Street press office said yesterday that no journalists would be allowed in to cover the event, which they insisted was private. Instead an official photograph will be released.

But that is still not likely to be enough to quell the discontent amongst Mr Brown's own ranks about the unveiling.

Many MPs are angry about the cost of the portrait – said to be £100,000 – and the choice of subject.

"To be spending that much on a monument to someone's vanity at a time when people are struggling is ill-judged, to say the least – particularly when it's as divisive a figure as Mrs Thatcher," Peter Kilfoyle, Labour MP for Liverpool Walton and a former defence minister, said yesterday. But the one person who has been largely silent in all this has been the lady herself. While Gordon Brown will say a few words before the formal unveiling of a portrait that is to hang permanently in what was her study during her 11-year premiership, Lady Thatcher herself is not expected to speak.

She is now a delicate 83-year-old and has become weaker recently. Four months ago, her daughter Carol revealed that Baroness Thatcher suffers from dementia, which leaves her struggling to recall very recent events. Many believe there may not be many more visits to her old seat of power.

The unveiling is one of several events that will mark the 30th anniversary of the May 1979 general election, which began Mrs Thatcher's term in office. Tomorrow BBC2 will broadcast a one-off drama starring Lindsay Duncan, reprising the frantic days that led up to her unceremonious removal from office in November 1990.

The BBC has also opened a comprehensive archive of documents and broadcasts featuring Mrs Thatcher, including a memo written in 1957, two years before she entered Parliament, saying that she was "very pretty and dresses most attractively".

Since she was removed from Downing Street in a cabinet coup in November 1990, Lady Thatcher has enjoyed better relations with her two Labour successors than with other Conservative leaders.

Relations with Sir Edward Heath, who preceded her, were so bad that they did not exchange a civil word for over 20 years.

She regarded her successor, John Major, as her protégé and promised to be a "good back-seat driver" while he was in Downing Street, but then felt that he had let her down.

But Tony Blair had been in Downing Street for only a few months before he invited her in for a private conversation, saying that he admired her as a conviction politician even if he disagreed with her politics.