The BBC's John Pienaar:"Lady Thatcher has stolen the spotlight"

The former prime minister - who is due to speak in defence of former Chilean dictator General Pinochet later on Wednesday - made her remarks in a speech to a fringe meeting at the party's conference in Blackpool.

Lady Thatcher's comments are being seen as the strongest made by the former Tory prime minister in terms of their hostility towards Europe.

Party sources say Lady Thatcher was in fact referring to this century's two world wars.

Tory leader William Hague stood by her side as she told a meeting of Scottish Tories in Blackpool: "My friends, we are quite the best country in Europe.

"I've been told I have to be careful about what I say and I don't like it.

"In my lifetime all our problems have come from mainland Europe and all the solutions have come from the English-speaking nations across the world."

When Lady Thatcher took her seat on the conference platform on Wednesday morning, she received a standing ovation from party members.

But former foreign secretary Sir Malcolm Rifkind warned of the danger of Lady Thatcher's tendency to "shoot from the hip".

He told the BBC: "She is a very astute political animal. When remarks are made of that kind and no explanation is provided at the time, it does create the impression that Britain and British opinion is somehow prejudiced and anti-European - and that can only damage our national interest."

'Thatcher's day'

Lady Thatcher is expected to continue to be the focus of attention at the conference on Wednesday when she addresses a fringe meeting on the case of General Augusto Pinochet.

The former prime minister had repeatedly offered her support to the former Chilean dictator who faces extradition to Spain to answer human rights abuse charges.

She has previously visited him in public at his temporary home in Surrey and will set out her views in detail in Blackpool.

Mr Hague has apparently made it clear he has accepted Wednesday will be "Thatcher's day" and, despite his desire to move on from the past, is planning little else to distract attention from her.

William Hague: Has Lady Thatcher's "absolute" support

On Tuesday, Lady Thatcher arrived at the Conservative conference to give a ringing endorsement to party leader William Hague.

And Mr Hague was standing beside her when she made the latest controversial comments.

Newspaper reports at the weekend had claimed the former prime minister had ridiculed Mr Hague at a private dinner party.

But when she turned up in Blackpool on the second day of the conference, Lady Thatcher scotched such rumours.

Asked if it was true she had dubbed him "wee Willie", she said: "No, it's not the language I ever use."

She then gave her strongest backing yet to the Tory leader, urging Conservatives to rally round him.

"I support him absolutely," she said. "Have you seen his policies? He's terrific.