The prime minister of Great Britain and the president of the United States celebrated 200 years of letting bygones be bygones last night at the British Embassy. Taking it all in with an indifference he didn't exactly feel at the time was King George III himself.

Margaret Thatcher and Ronald Reagan passed beneath George's gaze on their way upstairs to a black-tie dinner marking the start of diplomatic relations in 1785. Reporters couldn't tell whether they commented on the life-size portrait to one another.

But George's presence was a touch that didn't go unnoticed by others among the more than 120 British and Americans. Ambassador Sir Oliver Wright knew by heart the British king's reply when John Adams, America's first envoy to the Court of St. James's, presented his credentials on June 1, 1785.

" 'I was the last to consent to the separation,' " Wright quoted George as saying. " 'The separation having been made, and having become inevitable, I have always said, as I say now, that I would be the first to meet the friendship of the United States as an independent power.' "

Actually, history says things weren't all that chummy 200 years ago. The London Public Advertiser, in fact, was scandalized.

"An ambassador from America!" the Advertiser wrote. "Good heavens, what a sound! The Gazette surely never announced anything so extraordinary before . . . this will be such a phenomenon in the Corps Diplomatique that 'tis hard to say which can excite indignation most, the insolence of those who appoint the Character, or the meanness of those who receive it."

From the looks of things last night, however, you would never have known there had been a war.

At the dinner, Margaret Thatcher praised Anglo-American relations, complimented Reagan as "a wonderful president" and said, "As one old hand to another, welcome to a second term."

She went on to describe "how we see so many things the same way," and then, with a mischievous twinkle, said, "In this wonderful American-English accent, you ain't seen nothin' yet!"

The sedate, candle-lit dining room erupted into laughter.

In his equally complimentary response, Reagan told Thatcher, "Based on the career I once had before this one, you are a very tough act to follow."

Half the Cabinet, several senators and congressmen and other leading Washington figures were in the high-powered crowd invited by Wright and his wife, Marjory, to meet Thatcher, her husband, Denis, the Reagans and Vice President and Barbara Bush.

In some respects, the appearance of both the president and vice president at an embassy dinner was unprecedented. Reagan rarely shows up at foreign embassy dinners that visiting heads of state or government host, sending Bush in his place instead. Yesterday, however, a White House spokesman said, "It's a special occasion."

Certainly it capped a special day for Margaret Thatcher, who addressed a joint session of Congress and then received the Christian A. Herter Memorial Award for contributing to world understanding. The Boston World Affairs Council presented it to her at the embassy before the dinner began.

The 59-year-old prime minister, wearing a black gown with a collar of black feathers and a multi-strand necklace of pearls, received guests with her husband and the Wrights at the top of the residence's staircase. Behind her on a far wall was a life-size portrait of Queen Charlotte, who reigned with George III. Was she "Mad Charlotte," as history sometimes calls her?

"Actually," said Lady Wright, "I think she was frustrated by him."

From there, the Thatchers descended to the ground level to await the Reagans.

When they arrived, it was hardly history that dominated their conversation.

Margaret Thatcher to Nancy Reagan: "I saw Lucky today."

Nancy Reagan to Margaret Thatcher: "I know, and he's a sweet dog.