From The Conservative Party website
The context for this claim can be traced back to discussions in November 1980, as the following extract from a Times article from November 28th 1980 (and reproduced on the Margaret Thatcher Foundation website) explains:
There is good sense in some of the options which Britain is putting forward on the Falkland Islands, particularly the lease-back formula. Under this plan, sovereignty over the islands would be ceded to Argentina but Britain would lease back the islands, either without a time limit or for say, 99 years. It remains to be seen whether the islanders will agree with this or any of the other ideas which the British Government is canvassing after having taken soundings with the Argentines. The dispute over sovereignty has gone on for more than a hundred years.
Mr Nicholas Ridley, Minister of State at the Foreign Office, who is having talks with the islanders, apparently believes that a solution may be achieved by outright transfer of sovereignty, by transfer and lease back, by freezing the dispute for 25 years, or by taking what would be a drastic step and breaking off talks altogether. An outright transfer would be politically unacceptable. The lease-back idea, on similar lines as for Hong Kong, is the one Whitehall has been suggesting behind the scenes for some time.
Margaret Thatcher But the suggestion that a deal was done, as claimed by Heseltine last night, is a fiction, as explained by Lady Thatcher in her memoirs, The Downing Street Years (pp 175-6). She wrote of the lease-back idea:
"I disliked this proposal, but Nick and I both agreed that it should be explored, subject always to the requirement that the islanders themselves should have the final word. We could not agree to anything without their consent: their wishes must be paramount."
"As I rather expected, none of these diplomatic arguments in favour of lease-back had