Lady Thatcher has spoken publicly for the first time of her regret at the "impossible" situation she faced while trying to negotiate the handover of Hong Kong to China.

In her first interview for almost five years, the former prime minister has revealed her disappointment at failing to persuade Deng Xiaoping, the former Chinese premier, to let Britain extend its lease on the colony.

In a rare dropping of her guard, she admits to feeling "sad" when, seven years after she had left office in 1990, Britain's and Hong Kong's 145-year relationship ended, bringing down the final curtain on the British Empire.