SIR Alan Walters, Margaret Thatcher's economics guru who was the subject of her famous "advisers advise, ministers decide" quote, has died at the age of 82.

Sir Alan died peacefully at home on Saturday after being taken ill a couple of weeks ago, according to his wife, Paddie.

As an economist, Sir Alan was an early disciple of strict monetarist policies to restrict the total amount of money circulating in the economy in order to curb inflation. During steep inflationary periods in the 1970s his views came into favour with Tory front benchers and in 1981 he was called back from his job as a professor at the John Hopkins University in Baltimore to become Mrs Thatcher's personal economics adviser.

In that role he helped Sir Geoffrey Howe, the Chancellor of the Exchequer, persuade Mrs Thatcher to overturned Keynesian orthodoxy by raising taxes in the middle of a severe recession in 1981. The move drew outrage from his contemporaries with 364 economists writing to the Times newspaper calling for the rejection of monetarism.

Knighted in 1983, Sir Alan returned to the US to a former position as economic adviser to the World Bank, as well as taking a fellowship in a Washington think-tank.

He agreed to return to No 10 in May 1989 but his second stint in Downing Street lasted just five months after he found himself in conflict with the then-Chancellor, Nigel Lawson.

Mr Lawson was infuriated by Sir Alan's willingness publicly to question Treasury policy, undermining his own position on whether the UK should enter the Exchange Rate Mechanism.

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