The Palestine Liberation Organisation provoked a spat between newly-elected prime minister Margaret Thatcher and Foreign Secretary Lord Carrington, according to papers just released by the National Archive.

The papers also show her unswerving commitment to Israel and recognition of its position as the West’s

primary ally in the region, even at such an early stage in her leadership.

Unseating Labour’s Jim Callaghan in May 1979 after the so-called “winter of discontent”, Mrs Thatcher was just getting into her stride as the country’s first woman prime minister when the Middle East once again seized international attention.

Israel’s premier Menachem Begin and Egyptian president Anwar Sadat had made peace the year before but the repercussions of their historic deal were still reverberating.

There was the thorny question of the PLO, led by Yasir Arafat, and it was this that brought some sharp comments from Mrs Thatcher’s pen.

Lord Carrington prepared a long report giving his view of where to go with the PLO. He said there were already “informal” contacts between British officials and the PLO in New York, Beirut and London, though “successive governments have avoided ministerial contacts until the PLO accepts UN resolution 242 and Israel’s right to exist”.

The foreign secretary also mentioned possible contacts between the PLO and the IRA.

Lord Carrington concluded that Britain should support the idea of the PLO’s right to self-determination and that there should be a move towards more political contacts, in line with France and Germany. He also floated the idea that Britain should support a Palestinian right to a homeland as part of a comprehensive peace settlement.

Ms Thatcher disagreed. In a short hand-written note in thick black ink at the foot of one page, she wrote: “I am deeply opposed to the course of action set out in Lord Carrington’s minute.

“I don’t believe that the West Bank and Gaza and corridor [sic] is viable and I don’t think we have studied the ‘homeland’ policy sufficiently to know what it means in practice. MT.”

Next to the idea of a “modest advance in contacts”, Mrs Thatcher wrote “NO” in black ink in capital letters.

In a longer note on the back of another page, Mrs Thatcher voiced her clear support of Israel in the event of a threat to oil.

“Suppose that because of the actions and omissions of the US or the East Germans, the oil bearing states cease to be in private hands and come directly under Soviet control.

“There is only one nation that would stand up and fight, and that is Israel. If there is an ultimate E-W [sic] battle she would be our ally. The problem with Israel at the moment is Begin.

“Further — has anyone really thought through a new Palestinian homeland? I doubt it.”