UK gives Falklands medal for Argentine war role, hails Thatcher memorial

LONDON (Reuters) - Prime Minister David Cameron on Thursday hailed plans to erect a memorial to Margaret Thatcher in the contested Falkand Islands and announced Britain would be giving the British Overseas Territory a medal for its role in a 1982 war with Argentina.

The announcement is likely to anger the Argentine government which claims the islands as its own and has stepped up a campaign to get what it calls Las Malvinas back as exploration by oil and gas firms nearby has raised diplomatic tensions.

"Three decades ago, UK forces stood with the islanders as they faced a direct and grave threat to their sovereignty and it is absolutely right that we will be recognising this next year, when your islands will collectively receive the South Atlantic Medal," Cameron said in a Christmas message to the islands.

He said plans to erect a bronze bust of Thatcher in the Falklands, prime minister at the time of the 1982 conflict, were an apt way to honour someone he said had played such an important role in the islands' liberation from Argentine forces.

A spokesman for the Falkland Islands Government told Reuters that the memorial to Thatcher, a bust on a plinth of local stone, would be inaugurated on Jan. 10 2015 and be unveiled by Sir Mark Thatcher, her son.

Argentina invaded the Falklands -- which are 300 miles off the Argentine coast and 8,000 miles from Britain -- in 1982, prompting Baroness Thatcher, who died last year, to dispatch a naval task force to retake them in a short but bloody war.

The Argentine embassy in London did not immediately respond to requests for comment.

(Reporting by Andrew Osborn and William James; Editing by Andrew Osborn)