We knew we had won by the early hours of Friday, May 4, 1979, but it was not until the afternoon that we gained the clear majority of seats we needed.

There were many friends with me as we waited for the results to come in during those long hours in Conservative Central Office. But I can remember an odd sense of loneliness as well as anticipation when I received the telephone call that summoned me to the palace. I was anxious about getting the details of procedure and protocol right; it is extraordinary how on really important occasions one's mind often focuses on what in the cold light of day seem to be mere trivia. I now could not help feeling sorry for James Callaghan, who just a little earlier had conceded victory in a short speech, both dignified and generous.

At about 2:45 p.m. the call came. I walked out of the Central Office through a crowd of supporters and into the waiting car, which drove Denis and me to the palace.

All audiences with the Queen take place in strict confidence -- a confidentiality that is vital to the working of both government and constitution. As prime minister, I was to have such audiences with Her Majesty once a week, usually on a Tuesday, when she was in London and sometimes elsewhere when the royal family was at Windsor or Balmoral.

Perhaps it is permissible to make just two points about these meetings. Anyone who imagines that they are a mere formality or confined to social niceties is quite wrong; they are quietely businesslike and Her Majesty brings to bear a formidable grasp of current issues and breadth of experience. And, although the press could not resist the temptation to suggest disputes between the Palace and Downing Street, I always found the Queen's attitude toward the work of government absolutely correct.

Of course, under the circumstances, stories of clashes between "two powerful women" were just too good not to make up. In general, more nonsense was written about the so-called "feminine factor" during my time in office than about almost anything else. I was always asked how it felt to be a woman prime minister. I would reply: "I don't know: I've never experienced the alternative."

Denis and I left Buckingham Palace in the prime ministerial car: My previous car had already gone to Mr. Callaghan. As we drove out through the Palace gates, Denis noted that this time the guards saluted me. In those innocent days before security had to become so much tighter for fear of terrorism, crowds of well-wishers, sightseers, press and camera crews were waiting for us on Downing Street itself. The crowds extended all the way up Downing Street and out into Whitehall. Denis and I got out of the car and walked toward them.

When we turned to the cameras and reporters, the cheers were so deafening that no one in the street could hear what I was saying. Fortunately, the microphones thrust in front of me picked it up and carried it over the radio and television.

I quoted a famous prayer attributed to Saint Francis of Assisi, beginning, "Where there is discord, may we bring harmony." Afterward, a good deal of sarcasm was expended on this choice, but the rest of the quotation is often forgotten. Saint Francis prayed for more than peace; the prayer goes on: "Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope." The forces of error, doubt and despair were so firmly entrenched in British society, as the "winter of discontent" had just powerfully illustrated, that overcoming them would not be possible without some measure of discord.

Taken together, these three challenges -- long-term economic decline, the debilitating effects of socialism, and the growing Soviet threat -- were an intimidating inheritance for a new prime minister. I ought perhaps to have been more cowed by them in my imagination than in fact I was. Perhaps if I could have foreseen the great roller-coaster of events in the next 11 years, I would have felt greater apprehension. Perversely, however, the emotion I felt was exhilaration at the challenge. We had thought, talked, written, discussed, debated all these questions -- and now we would finally get the chance to deal with them ourselves. Socialism Had Run Its Course

Some of this exhilaration came from meeting a wide range of my countrymen in four years as opposition leader. They were so much better than the statistics said: more energetic, more independent, more restive at the decline of the country, and more ready than many of my parliamentary colleagues to support painful measures to reverse that decline. We would incur more odium, I believed, by reneging on our promises of radical conservatism with a U-turn than by pressing firmly ahead through whatever attacks the socialists hurled against us. I sensed, as apparently Jim Callaghan also sensed in the course of the campaign, that a sea change had occurred in the political sensibility of the British people. They had given up on socialism -- the 30-year experiment had clearly failed -- and were ready to try something else. That sea change was our mandate.

And there was a more personal factor. Chatham {British P.M. 1766-8} famously remarked: "I know that I can save this country and that no one else can." It would have been presumptuous of me to have compared myself to Chatham. But if I am honest, I must admit that my exhilaration came from a similar inner conviction.

My background and experience were not those of a traditional Conservative prime minister. I had grown up in a household that was neither poor nor rich. We had to economize each day in order to enjoy the occasional luxury. My father's background as a grocer is sometimes cited as the basis for my economic philosophy. So it was -- and is -- but his original philosophy encompassed more than simply ensuring that incomings showed a small surplus over outgoings at the end of each week. My father was both a practical man and a man of theory. He liked to connect the progress of our corner shop with the great complex romance of international trade, which recruited people all over the world to ensure that a family in Grantham could have on its table rice from India, coffee from Kenya, sugar from the West Indies and spices from the five continents. Before I read a line from the great liberal economists, I knew from my father's accounts that the free market was like a vast, sensitive nervous system, responding to events and signals all over the world to meet the ever-changing needs of peoples in different countries, from different classes, of different religions, with a kind of benign indifference to their status. Governments acted on a much smaller store of conscious information and, by contrast, were themselves "blind forces" blundering about in the dark, and obstructing the operations of markets rather than improving them. The economic history of Britain for the next 40 years confirmed and amplified almost every item of my father's practical economics. In effect, I had been equipped at an early age with the ideal mental outlook and tools of analysis for restructuring an economy ravaged by state socialism.

Fair shares somehow always turn out to be small shares. Then, someone has to enforce their fairness; someone else has to check that this fairness does not result in black markets or under-the-counter favoritism; and a third person has to watch the first two to make sure the administrators of fairness end up with no more than their fair share. All this promotes an atmosphere of envy and tittle-tattle. No one who lived through {post-World War II} austerity, who can remember, Spam and utility clothing, could mistake the petty jealousies, minor tyrannies, ill-neighborliness and sheer sourness of those years for idealism and equality.

I was again asking the Conservative Party to put its faith in freedom and free markets, limited government and a strong national defense; I knew that we would be able to keep the party united around this program for the election campaign. But in the dark days that would precede tangible success I would have to struggle to ensure that this time the Conservative Government kept its nerve. If we failed, we would never be given a second chance.

I was preoccupied by these reflections as we drove home, had a small family reception at Flood Street, and finally turned in for the night. My last thought was: The die is cast. We had made every sensible preparation for the election and for governing afterward. If honest endeavor were the test, we would not fail. In the end, however, Man proposes and God disposes. We might deserve success, but we could not command it. It was, perversely, a comforting thought. I slept well. At Home in the Office

Number 10 is more than an office: It is intended to serve as the prime minister's home. I never had any doubt that when the Callaghans had left I would move into the small flat there. Every practical consideration suggested it, as well as my own taste for long hours of work. As we used to say, harking back to my girlhood in Grantham, I liked living over the shop.

The flat at No. 10 quickly became a refuge from the rest of the world, though on occasion a good deal of business was done there too. It was right at the top of the building -- up in the rafters, in fact. But that was an advantage, for the stairs provided me with about the only real exercise I got. There were plenty of cupboards and a box room in which to dump everything until it found a more permanent place and into which piles of books and papers could be pushed when visitors were due.

Denis and I decided we would not have any living-in domestic help. No housekeeper could have possibly coped with the irregular hours. When I had no other engagement, I would go up to the flat for a quick lunch of salad or poached egg on Bovril toast. But usually it was 10 or 11 o'clock at night when I would go into the kitchen and prepare something -- we knew every way in which eggs and cheese could be served and there was always something to cut at in the fridge -- while Denis poured me a nightcap.

The deep freeze was always kept well stocked and the microwave, when it appeared, did sterling work when sudden meals were required because we were working late into the night on a speech, a statement or decisions required for the Falklands campaign or the Libyan raid. On these occasions we used the small dining room in the flat, which was next to the even smaller kitchen; secretaries from the Political Office, not paid by the taxpayers, would always lend a hand.

I could never have been prime minister for more than 11 years without Denis at my side. Always a powerful personality, he had very definite ideas about what should and should not be done. He was a fund of shrewd advice and penetrating comment. And he very sensibly saved these for me rather than the outside world, always refusing to give interviews. He never had a secretary or public relations adviser but answered between 30 and 50 letters every week in his own hand.

Denis shared my own fascination with politics -- that, of course, is how we first met -- but he also had his own outside interests, not least sport. He was passionately interested in rugby football -- having indeed been a referee. Denis delivered many speeches on his favorite (nonpolitical) subjects. The one that for me best summed up his character and convictions was on sport and ethics and contained these lines:

"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honor."

Although Denis had a deep interest in everything military, and by choice would have stayed in the army at the end of the Second World War, the unexpected death of his father left him with no option but to return to run the family business, a paint and chemicals company. I am glad he did. For his industrial experience was invaluable to me. Not only was he familiar with the scientific side (something we had in common); he was also a crack cost and management accountant. Nothing escaped his professional eye -- he could see and sense trouble long before anyone else.

Being prime minister is a lonely job. In a sense, it ought to be: You cannot lead from the crowd. But with Denis there I was never alone. The Art of Downing Street

In some ways 10 Downing St. is an unusual sort of home. Portraits, busts and sculptures of one's prime ministerial predecessors remind one of the nearly 250 years of history into which one has stepped.

As prime minister one has the opportunity to make an impact on the style of No. 10. Outside the flat I had displayed my own collection of porcelain, which I had built up over the years. I also brought with me a powerful portrait of Churchill from my room in the House of Commons. It looked down on those who assembled in the antechamber to the Cabinet Room. When I arrived, this area looked rather like a down-at-heel Pall Mall club, with heavy and worn leather furniture; I changed the whole feel by bringing in bookcases, tables and chairs from elsewhere in the building. There might be some difficult times to come in the Cabinet Room itself, but there was no reason people should be made to feel miserable while they were waiting to go in.

Downing Street had no silver. Whenever there was an official dinner the caterers had to bring their own. Lord Brownlow, who lived just outside Grantham, lent me silver from his collection at Belton House: It sparkled and transformed the No. 10 dining room. I also had the study repapered at my own expense. Its unappealing sage-green damask flock wallpaper was stripped off and replaced by a cream stripe, which was a much better background for some fine pictures.

I felt that Downing Street should have some works by contemporary British artists and sculptures, as well as those of the past. I had met Henry Moore when I was secretary of state for education and much admired his work. The Moore Foundation let No. 10 borrow one of his smaller sculptures, which fit perfectly in an alcove in the main hallway. Behind the sculpture was hung a Moore drawing, which was changed every three months; among my favorites were scenes of people sleeping in the London Underground during the Blitz.

I felt strongly that when foreign visitors came to Downing Street they should see something of Britain's cultural heritage. When I came to No. 10 all the paintings in the main dining room were copies. They were replaced. For example, I was lent a picture of George II, who had actually given No. 10 to Sir Robert Walpole, the first prime minister. I was able to borrow some Turners, a Raeburn from Scotland and some pictures from the Dulwich Gallery. I also had some fine portraits hung of the nation's heroes; through them you could feel the continuity of British history. I recall on one occasion watching President Giscard d'Estaing gazing at two portraits in the dining room -- one of the young Nelson and the other of Wellington. He remarked on the irony. I replied that it was no less ironic that I should have to look at portraits of Napoleon on my visits to Paris. In retrospect, I can see this was not quite a parallel. Napoleon lost.

On this first evening, though, I could do little more than make a brief tour of the main rooms of the building. Then I entered the Cabinet Room where I was greeted by more familiar faces -- among them my daughter Carol and Cynthia Crawford -- known to all of us as "Crawfie" -- who acted as my personal assistant and who has stayed with me ever since. We did not waste much time in conversation. They were anxious to sort out who was to go into which office. I had exactly the same task in mind: The choice of my Cabinet. The Quick Cabinet

The press expects the cabinet of some 22 ministers to be appointed and the list to be published within 24 hours -- otherwise it is taken as a sure sign of some sort of political crisis. My American and other foreign friends are often astonished at the speed with which British governments are formed and announced.

So I do not think that any of us at No. 10 relaxed much that day, which turned out to be a long one. (The previous night I had had no more than a couple hours' sleep, if that.) I received the usual detailed security briefing given to incoming prime ministers. Then I went upstairs to the study in which I was to spend so many hours in the years that followed. We began to sift through the obvious and less obvious names and slowly this most perplexing of jigsaws began to take shape.

At 8:30 p.m., we took a break for a meal. Knowing there were no canteen facilities at No. 10, my personal staff brought in a Chinese meal from a take-away and some 15 of us sat down to eat in the large dining room. (That, I think, was the last take-away while I was prime minister.)

By about 11 p.m. the Cabinet list was complete and had been approved by the Queen. I went upstairs to thank the No. 10 telephonists who had had a busy time arranging all the appointments for the following day. Then I was driven home.

On Saturday I saw the future Cabinet one by one. By Saturday afternoon the Cabinet was appointed and the names announced to the press. That gave every new minister the weekend to draft instructions to his department to put into effect the manifesto policies. In fact, there was slightly more time than usual, since Monday was a bank holiday.

A week later I flew to Scotland to address the Scottish Conservative Conference. My main message was a deliberately somber one, intended for Britain as a whole. That same day an inflation figure of 10.1 percent had been published. It would rise further. I noted:

"The evil of inflation is still with us. We are a long way from restoring honest money ... But little can be achieved without sound money. It is the bedrock of sound government."

As our economic and political difficulties accumulated in the months ahead, no one could claim that they had not been warned.

We arrived back at RAF Northolt and drove to Chequers, where I spent my first weekend as prime minister. I do not think anyone has stayed long at Chequers without falling in love with it. From the time of its first prime ministerial occupant, David Lloyd George, it has been assumed that the holders of that office would not necessarily have their own country estates. For that reason, Lord Lee's gift to the nation of his country house for the use and relaxation of prime ministers marks as much a new era as did the Reform Bills.

When I arrived as prime minister, the curator was Vera Thomas, who knew and loved each perfectly polished piece of furniture, each historic portrait, each glittering item of silver. Chequers itself is an Elizabethan house, but has been substantially rebuilt over the years. The center of the house is the great hall, once a courtyard, enclosed at the end of the last century, where in winter a log fire burns, giving a slight tang of wood smoke through every room. Weekends at Chequers

The group that gathered for Sunday lunch just 10 days after our election victory was fairly typical of a Chequers weekend.

We were still in a mood to celebrate our election victory. We still had that spirit of camaraderie, which the inevitable disputes and disagreements of government were bound to sap. The meal was a lighthearted and convivial one. It was perhaps an instance of what a critic was later to call "bourgeois triumphalism."

But we were aware that there was a long road ahead. As my father used to say:

"It's easy to be a starter, but are you a sticker too?

"It's easy enough to begin a job, it's harder to see it through."

At 7 p.m. that evening Denis and I returned to London to begin my second full week as prime minister. Work was already piling up, with boxes coming to and from Chequers. I recall once hearing Harold Macmillan tell an eager group of MPs, none more eager than Margaret Thatcher, that prime ministers (not having a department of their own) have plenty of spare time for reading. He recommended Disraeli and Trollope. I have sometimes wondered if he was joking. 1993 by Margaret Thatcher. From the book "The Downing Street Years" by Margaret Thatcher to be published by HarperCollins Publishers Inc.