Legions of admirers cast her as a pioneering politician whose bold policies rescued Britain from economic collapse, but equally numerous detractors see her as a heartless champion of free market orthodoxy at the expense of the poor.
Memories of her 1979-1990 rule have come into sharper focus for many Britons because the country is again grappling with high unemployment, spending cuts, tensions with Europe, union discontent and riots -- all features of the Thatcher years.
"Her legacy is enormous," said Conservative lawmaker John Whittingdale, who was once Thatcher's political secretary.
"She carried through policies that transformed Britain and indeed Britain's relationship with the world, which will never be reversed and nor would anyone contemplate reversing them."
He cited Thatcher's role in ending the Cold War through her alliance with then U.S. President Ronald Reagan, which along with her successful prosecution of the 1982 Falklands war with Argentina, bolstered British authority on the world stage.
Thatcher's admirers also credit her with turning around, through privatisations and deregulation, what they saw as a quasi-socialist British economy in steep decline and at the mercy of powerful unions when she first took office.
Her detractors point to the bitter and violent strikes when she took on the coalminers' union in 1984, riots in 1990 over her wildly unpopular Poll Tax, and swathes of industrial Britain abandoned to long-term unemployment and decline.
Her tenure became synonymous with the rise of the "yuppie" and a greedy, individualistic capitalist culture that many blame today for Britain's economic woes and lack of social cohesion.
"The legacy of Margaret Thatcher was one of division and conflict and the political encouragement of the 'greed is good' culture at the root of the banking crisis we are all paying a heavy price for today," said Bob Crow of the RMT rail union.
In a sign of her continuing ability to stoke controversy, more than 24,000 people have signed a tongue-in-cheek petition pushing for any state funeral for Thatcher to be privatised.
"This unique opportunity is an ideal way to cut government expense and further prove the merits of liberalised economics Baroness Thatcher spearheaded," the petition reads.
Thatcher is now 86, frail and suffering from dementia.
"FEMINISM IS POISON"
Thatcher's power to polarise makes it difficult for those trying to give a balanced account of her time in office.
"The thing that I noticed when I was making the film, is how fiery hot on both sides the feelings were. People wanted to hold her as this indelible icon or they wanted to regard her as a monster," Meryl Streep, who plays Thatcher in The Iron Lady, told Reuters.
Streep said she did not agree with many of Thatcher's policies but admired many of her personal qualities, a stance shared by many British people.
Thatcher broke entrenched gender and class barriers in her rise from humble beginnings as a grocer's daughter to leader of the centre-right Conservative Party and then prime minister.
"Big personalities will always make their mark," Conservative lawmaker Louise Mensch told Reuters.
"Thatcher was a woman succeeding in a man's world when it was unbelievably unusual ... Whoever the first woman president of the United States is, she will have a great debt to Margaret Thatcher," she added, speaking after seeing The Iron Lady in New York.
A bronze statue of Thatcher, pointing emphatically in her trademark power suit and power-set hairdo, is conspicuous among the otherwise exclusively male statues of former prime ministers in the ornate lobby adjoining parliament's debating chamber.
However, even Thatcher's potential as a role model for ambitious women is disputed, given that she surrounded herself with men throughout her career and did little to help any other woman break the glass ceiling.
"The feminists hate me, don't they? And I don't blame them. For I hate feminism. It is poison," Thatcher said, according to Paul Johnson, one her closest advisers, writing in Britain's centre-right Spectator magazine last year.
"WE REVERE HER"
Part of Thatcher's continuing ability to stoke passions is the enduring influence of her ideology on Conservative politicians and voters today, even among those too young to remember living under her rule.
The Conservatives are in power now, although Prime Minister David Cameron has been careful to differentiate himself from Thatcher with his "Big Society" mantra, which encourages grassroots community action as opposed to state intervention.
The slogan stands in sharp contrast to Thatcher's famous statement that "there is no such thing as society" -- although ironically, that quote was part of an interview in which she too was encouraging individuals not to rely too much on the state.
In a poll of Conservative Party members by the conservativehome website late last month, respondents put Thatcher at the top of a list of politicians that most closely represented their views, seven places ahead of Cameron.
In a wider survey in November, a YouGov/Sunday Times poll of 1,700 adults found Thatcher to be the greatest British leader since 1945, ahead even of wartime leader Winston Churchill.
Her ideology permeates current Conservative thinking, even among the younger members of parliament first elected in 2010, many of whom were children when she was in power.
"I certainly know that all my younger generation of colleagues ... believe she is one of the greatest political figures of the modern age and we revere her," Mensch said.
Like Thatcher taking harsh measures to rescue a faltering economy, Cameron's coalition government has made the deepest public spending cuts in a generation to tackle a big budget deficit, laying off thousands of public sector workers.
Also like Thatcher, Cameron has taken on the unions over pension reform and adopted a tough stance on Europe, garnering praise from his party's powerful Thatcherite wing by vetoing an EU treaty to rescue the euro.
Thatcher once said the currency was "bound to fail, economically, politically and indeed socially".
The debate over Thatcher's legacy is likely to rumble on among Britain's next generation of politicians, who like their predecessors, appear to either love or loathe the former leader.
"(She is) one of the most significant politicians of the 20th Century, an inspiration to my political belief in giving people aspirations and helping them to achieve them," Ben Howlett, who heads the Conservatives' youth wing, told Reuters.
Predictably, the head of Labour Students, the opposition Labour party's student body, takes a different view.
"There are alarming parallels between what Cameron is doing today and what Thatcher did in the 80s," said Olivia Bailey.
"Thatcher to me serves as both a warning and a motivation. A warning of the damage that can be done by Conservative ideology and a motivation to fight for the values held by the Labour Party - to fight to unite our society, not divide it."
