Declassified cables show U.S. felt Thatcher had not considered diplomatic options, and feared Soviet Union could be drawn in.
The US feared the Thatcher government "had not thought much about diplomatic possibilities" for resolving the Falklands crisis when it dispatched a military taskforce 30 years ago, and predicted the conflict would be a "close-run thing" that could well bring about Margaret Thatcher's fall, according to newly declassified American diplomatic cables.
The documents, published by the National Security Archives, an independent research organisation in Washington, also highlight American worries that a protracted war could draw in the Soviet Union on Argentina's side, with far-reaching geopolitical repercussions in an area of the world the US saw as its backyard.
To try to ensure that did not happen, the Reagan administration provided the Thatcher government with substantial covert support, particularly in the form of satellite intelligence on Argentinian military deployments on the Falklands, while outwardly portraying itself as neutral.
In a personal note to Thatcher on 1 April 1982, Reagan wrote: "I want you to know that we have valued your co-operation on the challenges we both face in many different parts of the world. We will do what we can to assist you here. Sincerely, Ron."
Reagan dispatched his secretary of state, Alexander Haig, to try to hammer out a compromise solution in a shuttle diplomatic mission between London and Buenos Aires in early April. On 9 April, after five hours with Thatcher and her ministers, Haig reported back that the mission would be a "very steep uphill struggle".
"The prime minister has the bit in her teeth," Haig wrote to Reagan. "She is clearly prepared to use force, though she admits a preference for a diplomatic solution. She is rigid in her insistence on a return to the status quo ante, and indeed seemingly determined that any solution involve some retribution."
In particular, Thatcher rejected a key element in the US peace plan by which a third country, such as the US, Canada or a Latin American state, would oversee the transition back to British administration.
Haig noted that the new foreign secretary, Francis Pym, "does not share her position and went surprisingly far in showing this in her presence. Whether this means he will have a restraining influence or instead that there will be a problem within the government is impossible to say."
Haig concludes: "All in all, we got no give in the basic British position and only the glimmering of some possibilities, and that only after much effort by me, with considerable help not appreciated by Mrs Thatcher from Pym. It is clear they had not thought much about diplomatic possibilities.
"They will now, but whether they become more imaginative or instead recoil will depend on the political situation and what I hear in Argentina."
The US embassy in London made clear in a cable dated 7 April that "wets" in Thatcher's government shared Haig's concern that the British military had the upper hand over the diplomats.
"Tory moderates and Foreign Office are concerned that Prime Minister Thatcher has been listening largely to the Ministry of Defence, especially senior naval officers, and may not adequately be considering non-military options," the embassy cable said.
American government analysts believed a British victory was far from guaranteed. The state department's intelligence bureau produced an analysis on 7 April 1982 pointing out the vulnerability of the British taskforce so far from home. It said: "The effectiveness of the fleet, far from its maintenance bases, will rapidly deteriorate after its arrival on station. [Thatcher's] damaged leadership could not survive a futile 'voyage to nowhere'."
"If Thatcher fails to redeem her reputation and the nation's honour, she could be finished as a Tory leader and prime minister," the state department wrote. "Yet military action is full of risks and a British reconquest, if feasible at all, is likely to be expensive."
Jim Rentschler, a White House staffer in Haig's entourage, noted that "the South Atlantic caper" would clearly be a "close-run thing" – "a fact Mrs Thatcher herself may have recognised when she pointedly showed us portraits in No 10 not only of Nelson but also Wellington [who famously described Waterloo as 'a close-run thing']."
Washington's nightmare was a drawn-out conflict in which neither side could land a killer blow, potentially drawing in Soviet support for Argentina on a continent the US saw as its zone of influence.
Carlos Osorio, who led the Falklands documentation project at the National Security Archive, said: "The Reagan administration could see that if the Brits did not succeed initially, they were not going to let this thing go, and if the Argentinians were pushed out but wanted to continue fighting, their only option was Soviet support. It was discussed in several US documents."
One of those documents from the White House situation room on 17 April 1982 quotes British intelligence as saying: "The Soviet Union is reported to be ready to offer Argentina ships, aircraft and land-based missiles in exchange for grain."
The document notes that the "Argentine foreign ministry has denied in a telegram to the Argentine embassy in Venezuela that the Soviet Union is providing intelligence material", but it adds: "The high level of Soviet photographic coverage of the area is unusual."
Meanwhile the US was providing extensive intelligence assistance to Britain, for which Thatcher expressed her gratitude. Some aspects of that US intelligence role remain secret. Among the redactions to the US Falklands documents, the most extensive use of black pen is on one dealing with the sinking of the General Belgrano, an Argentinian warship hit by a British torpedo while outside the UK-declared exclusion zone around the Falklands on 2 May 1982 with the loss of 323 Argentinian lives.
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