MARGARET Thatcher was privately warned to break off relations with a shadowy adviser who claimed to have masterminded the defeat of the miners' strike, according to newly released government papers.

Files released by the National Archives at Kew, west London, show officials feared David Hart - a wealthy Old Etonian property developer - was exploiting his links with No 10 for his own ends.

They warned that unless the Prime Minister severed her links with him, he would end up causing her "grave embarrassment".

The flamboyant Mr Hart had managed to ingratiate himself with Mrs Thatcher with his enthusiasm for her free market policies, offering informal advice on a range of issues, but it was during the miners' strike, which began in 1984, that he came into his own.

From his suite at Claridges, he established himself as a go-between between Mrs Thatcher and National Coal Board chairman Ian MacGregor while making regular forays to the coalfields in support of the working miners in his chauffeur-driven Mercedes.

He was said to have bankrolled the breakaway Union of Democratic Mineworkers and organised the legal action by working miners which led to the strike by Arthur Scargill's National Union of Mineworkers strike being ruled illegal.

He later boasted that Mrs Thatcher came to rely on him completely, claiming: "It got to the point where she really let me run it."

While the true extent of his influence has been questioned, the files show that by the time the strike was drawing to a close in 1985 there was mounting concern in Downing Street about his activities.

In February 1985 Mrs Thatcher's political secretary Stephen Sherbourne wrote to warn her that while Mr Hart had proved "useful" in the past, he had begun to pursue his own agenda, briefing against ministers like Energy Secretary Peter Walker.

"Though DH has on occasions provided you with useful intelligence he has recently been pursuing his own ends at the expense of those of the Government," he wrote.

"For example, while professing total loyalty to you, he has not shrunk from denigrating Peter Walker's activities even though the latter was carrying out the line agreed with you and ministers.

"DH has his own views on how the coal strike should end and has been pursuing his cause even when it conflicted with the interests of yourself and Peter Walker. And in so doing he has exploited his No 10 connection."

He said that Mr Hart had even sought to interpose himself as an intermediary with the White House in discussions over Ronald Reagan's "Star Wars" strategic defence initiative, and warned that he may try to interfere in Northern Ireland as well.

"So long as he feels he can telephone me regularly on whatever issue, so long will there be a risk of grave embarrassment to you," he wrote.

"I think therefore we must consider how we sever the link with DH in a way which is clear to him but does not unduly offend him."

In the event the link was abruptedly broken not long afterwards when a misjudged attempt by Mr Hart to lobby the Americans on behalf of a British defence supplier resulted in the contract they were seeking being awarded to the French.

He nevertheless re-emerged in the 1990s as an adviser to Conservative defence secretaries Malcolm Rifkind and Michael Portillo.