Ronald Reagan issued a last-ditch appeal to Margaret Thatcher to abandon her campaign to retake the Falklands and to hand over the islands to international peacekeepers, according to official British documents made public on Friday.
Files released by the National Archives at Kew, South West London, under the 30-year rule show that as British troops closed in on final victory, the US president made a late-night phone call to Mrs Thatcher urging her not to completely humiliate the Argentines.
However, his request fell on deaf ears as a defiant Prime Minister insisted that she had not sent a British task force across the globe just 'to hand over the Queen's islands to a contact group'.
Mr Reagan made his call to Mrs Thatcher in Downing Street at 11.30pm London time on May 31, 1982, as British forces were beginning the battle for Port Stanley, the Falklands capital.
The Americans had already proposed sending a joint US-Brazilian peacekeeping mission, and the president suggested that the time had come to show magnanimity.
'The best chance for peace was before complete Argentine humiliation,' he told her. 'As the UK now had the upper hand militarily, it should strike a deal now.'
But Mrs Thatcher said she could not contemplate a ceasefire without Argentinian withdrawal.
According to the official No 10 note, she told him: 'Britain had not lost precious lives in battle and sent an enormous task force to hand over the Queen's islands to a contact group.
'As Britain had had to go into the islands alone, with no outside help, she could not now let the invader gain from his aggression. The Prime Minister asked the president to put himself in her position.
'She had lost valuable British ships and invaluable British lives. She was sure that the president would act in the same way if Alaska had been similarly threatened.'
The Prime Minister said 'the most sensible thing' would be for the Argentinians to withdraw, before ending the conversation with a familiar refrain: 'There was no alternative.'
As the battle reached its climax she even drafted a telegram to the Argentinian leader General Galtieri - although it was never sent - demanding for a final time that he withdraw his forces.
'In a few days the British flag will be flying over Port Stanley. In a few days also your eyes and mine will be reading the casualty lists,' she wrote.
'On my side, grief will be tempered by the knowledge that these men died for freedom, justice and the rule of law. And on your side? Only you can answer that question.'
The files also include Mrs Thatcher's hitherto unpublished testimony to the Franks Inquiry into the conflict.
In it, she described her horror when, at the end of March 1982, she became aware that the Argentinians were about to invade.
'I just say it was the worst, I think, moment of my life,' she told the inquiry.
'I never, never expected the Argentines to invade the Falklands head-on. It was such a stupid thing to do, as events happened, such a stupid thing even to contemplate doing.'