In the final part of our series to mark 25 years since Margaret Thatcher's first election victory, Nick Morrison looks at how the Iron Lady altered the economic, social and political landscape of the North-East.

AT first, it seemed to be a huge gaffe, a gift to her detractors of monumental proportions. Here was Prime Minister Margaret Thatcher, photographed on a solitary walk across a wasteland where once a factory employing thousands of men had stood. If ever an image captured the devastation wrought by the Government's economic policies, this was it.

But Mrs Thatcher didn't get to be prime minister for 11 years for no reason. After crossing the desolate landscape, the 250-acre former home to steel-makers Head Wrightson on the Thornaby bank of the river Tees, the Iron Lady announced it would be the site of the biggest urban regeneration programme of its kind anywhere in Europe.

Having triumphed with a second landslide victory in the 1987 General Election just months earlier, Mrs Thatcher was determined that, next time, the Tories would carry the inner cities with them as well. To this end, the Government embarked on a major offensive to tackle urban decay, even though she was keen to emphasise that "there is no magic wand".

Today, thanks to the efforts of the Teesside Development Corporation (TDC), the scene of that "walk in the wilderness" is now home to a satellite campus of Durham University, as well as numerous businesses. No longer a wasteland, it is a landscaped haven of offices and college buildings.

"I feel Margaret Thatcher brought the North-East back from the dead," says Stephen Smailes, a Tory member of Stockton Council for 37 years. "Without her and the money that the TDC ploughed into Stockton and into Hartlepool, this would be a ghost town.

"We were going down fast until Mrs Thatcher and the TDC came in - they brought prosperity to Teesside. We would be in a hell of a position without them because I don't think we had the expertise on Teesside to do it for ourselves."

But if the TDC brought development in the shape of the Teesdale site, Teesside Park on the old Stockton Racecourse site and Hartlepool Marina, the overall record of Mrs Thatcher's government of the region is less appealing. The 11 years of her premiership saw an estimated 248,000 jobs lost.

British Steel had been one of the North-East's major employers, but Mrs Thatcher's reign saw the number of BS workers in the region fall from 33,000 to around 6,500, with the closure of the Consett steelworks the biggest single blow, and the rest of the cuts on Teesside. In 1984, there were 23,000 men employed in the region's mines; in 1990 there were just 9,500. Shipbuilding suffered the biggest collapse - down from 27,000 in 1977 to the 1,500 employed by Swan Hunter.

There were gains, particularly from inward investment, which saw 18,000 new jobs created, most notably at Nissan in Sunderland, but for Peter O'Brien, policy officer for the TUC in the North-East, Mrs Thatcher's legacy to the region was overwhelmingly a negative one.

"She had a devastating impact on the numbers of people employed in the traditional industries. For a long time, shipbuilding, mining and steel had been the staple industries in the region, and the shift from public sector to private sector ownership saw a lot of people lose their jobs," he says. "I don't think the region has really recovered in terms of the number of people employed. It was a real sea-change, and we've been trying to make up for it ever since."

He concedes that the diversification which was forced on the North-East economy, spreading the load across a larger number of smaller businesses instead of relying on a few heavy industries, has been a positive move, but says the collapse of the traditional giants has deprived the region of a large number of highly-skilled jobs, which are yet to be replaced.

And he says the politically motivated destruction of the coal industry has had grim consequences for the former mining communities, which are still being felt 20 years on, in terms of social problems, crime and drug abuse.

In short, he says, the region did badly by Mrs Thatcher. "The divide between the North-East and other, richer regions started in the 1930s, but the recession of the 1980s predominantly affected the regions that relied on manufacturing and traditional industries. I don't think the Thatcher years did the North-East much good," he says.

"The Thatcher era was one of Government taking a back seat and a hands-off approach, and that has been proved to have exacerbated the regional divide."

But some welcomed the new style of reducing Government interference and letting market forces have their way.

"Deregulating labour and improving conditions for commerce were extremely important and leave a legacy of a highly dynamic region, with some pretty exciting companies doing some very exciting things," according to George Cowcher, chief executive of the North-East Chamber of Commerce.

"In the 1970s, the UK was seen as economically the sick man of Europe. Now, we have totally reversed that and we have a very strong, robust economy, and we're more adaptable than other states in the European Union, and Margaret Thatcher contributed to that."

He says one of Mrs Thatcher's most important achievements was to change the economic culture, creating a new aspiration among entrepreneurs who no longer looked to the state to bail them out when the going got tough.

But he says, overall, her legacy is a mixed bag, and there was a downside to the economic overhaul.

"Her policies were pretty brutal, particularly in the early days, and whole swathes of industry were lost. Perhaps if it had been dealt with rather more subtly, we would still have some of those now.

"And people tend to forget the total disaster that happened before the Falklands, when British industry was made to be very uncompetitive and companies disappeared overnight, good ones as well as bad. We have never really recovered from that. It was, in some ways, an enormous act of vandalism."

And it is perhaps this which explains why, despite the best efforts of the TDC and its Tyneside equivalent, the North-East's inner cities never learned to love Mrs Thatcher, even though Coun Smailes insists her legacy is largely a positive one.

"Margaret Thatcher is not remembered on Teesside for the work that she did, she is really remembered for the dreaded poll tax," he says. "But she saw the potential of what the people here could do and they delivered it. The people of Teesside owe a hell of a lot to Margaret Thatcher."