Former British prime minister Margaret Thatcher, the "Iron Lady" who shaped a generation of British politics, died following a stroke on Monday at the age of 87.

Her spokesman, Lord Bell, said: "It is with great sadness that Mark and Carol Thatcher announced that their mother Baroness Thatcher died peacefully following a stroke this morning."

The former premier, who led Britain from 1979 to 1990, suffered from dementia and had appeared rarely in public in recent years. She was last in hospital in December for a minor operation to remove a growth from her bladder.

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She served as prime minister for 11 years, beginning in 1979. Right-wingers hailed her as having hauled Britain out of the economic doldrums but the left accused her of dismantling traditional industry, claiming her reforms helped unpick the fabric of society.

On the world stage, she built a close close relationship with U.S. president Ronald Reagan which helped bring the curtain down on Soviet Communism. She was leader of Britain through its 1982 war in the Falklands. She also fiercely opposed European integration.

The former Conservative Party leader remains the only female premier in British history and was the 20th century's longest continuous occupant of Downing Street.

Her daughter once revealed that the former premier had to be repeatedly reminded that her husband Denis had died in 2003.

She was told by doctors to quit public speaking a decade ago after a series of minor strokes.

Michael Howard, Conservative leader 2003-2005, told Sky News television: "It's terribly sad news. She was a titan in British politics.

"I believe she saved the country, she transformed our economy and I believe she will go down in history as one of our very greatest prime ministers."

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Buckingham Palace, where the queen meets regularly with all prime ministers, including Thatcher, released this statement: "The Queen was sad to hear the news of the death of Baroness Thatcher. Her Majesty will be sending a private message of sympathy to the family."

British Prime Minister David Cameron said on Twitter, "It was with great sadness that I learned of the death of Lady Thatcher. We have lost a great leader, a great prime minister and a great Briton."

Since the news of Thatcher's death, Britons have been circulating a quote famously attributed to the fierce leader: "Being powerful is like being a lady. If you have to tell people you are, you aren't."