LONDON (Reuters) - Former prime minister Margaret Thatcher was secretly urged to consider abandoning Liverpool to "managed decline" after riots erupted in the city in 1981, newly released government papers showed on Friday.
Senior ministers warned her that it might be a waste to pour money into the "stony ground" of Merseyside after the decline of its heavy industry led to high unemployment and social unrest.
In some of the worst inner city riots of the last century in Britain, nearly 500 police were injured and at least 70 buildings severely damaged during nine days of violence in the port city.
At a time of public cuts after a severe recession, former Chancellor Geoffrey Howe said the government must not "overcommit scarce resources to Liverpool," despite calls from other ministers to regenerate old industrial towns.
"I cannot help feeling that the option of managed decline is one which we should not forget altogether," Howe wrote in a letter to Thatcher, according to papers released by the National Archives. "We must not expend all our limited resources in trying to make water flow uphill."
Thatcher sent a senior minister -- environment secretary Michael Heseltine -- to find out what had gone wrong in the once mighty port that boomed during the Industrial Revolution.
Heseltine said the idea of abandoning the city that produced the Beatles "never got any traction." Instead, he tried to encourage private sector investment to regenerate the area.
"I simply wouldn't countenance that you could say that (in) one of England's great cities, a world city, we're going to manage decline here," he told BBC radio. "That would simply be unthinkable."
Speaking to the BBC, Howe said he did not remember discussing the option of managing Liverpool's decline.
"I don't recall how that argument got into the discussion at all. It certainly doesn't sound very considerate," Howe said.
Commentators noted parallels between today's Britain and the one discussed in the government papers. Rioters clashed with police in several English cities this summer, the economy is once again on the brink of recession and another royal wedding offered some light relief.
Thatcher's press secretary wrote to the prime minister after the wedding of Charles and Diana in 1981, saying: "The triumph of the royal wedding has been a national tonic."
The Iron Lady's tight grip on public spending was laid bare in another declassified document that laid out the cost of refurbishing her official London residence, 10 Downing Street.
She queried the total bill of 1,836 pounds and said she would pay for her own ironing board rather than using 19 pounds of taxpayers' money.
"I could use my own crockery," she added, noting the 209 pounds bills for new plates.
(Reporting by Peter Griffiths; Editing by Steve Addison)