Thatcher successfully challenged Argentina to put up or shut up by withdrawing the Royal Navy cover for the Falklands, Galtieri fell for it and Argentina got a pasting.
Incorrect.
The Thatcher government had begun diplomatic negotiations in 1980 for a peaceful transfer of sovereignty to Argentina subject to the consent of the Falkland Islanders. However, the islanders were resolutely opposed to the plan and were supported by backbenchers in Parliament
Galtieri ousted his junta predecessor in December 1981. As part of a deal to secure the Argentine Navy's support, he agreed to back their plan to seize the Falkland Islands in 1982, ahead of the 150th anniversary. The Argentine Navy's initial plan called for a 'soft' invasion later in the 1982, just in time to be presented as fait accompli at the UN General Assembly meeting to be held in Autumn 1982. The Argentine Navy, and particularly the head of the Navy, Admiral Anaya wanted the glory for themselves. This was important when the military junta was struggling with economic problems and the Navy in particular was heavily involved in the torture, disappearance and murder of political dissidents and many innocent civilians.
Now the Argentine Navy had already been developing another plan to seize South Georgia by sending marines disguised as civilian scrap merchant dealers to make an unauthorised landing and raise the Argentine flag, much as they had done on Southern Thule in 1976. This plan should have been cancelled when the go ahead was given for the Falklands operation but it wasn't. The 'scrap merchant dealers' landed at Leith Harbour on 19 March and raised the Argentine flag.
The illegal landing was immediately reported by the British Antarctic Survey team on South Georgia to the Governor of the Falkland Islands, who in turn reported it to London. Diplomatic protests were lodged and the Argentine captain was ordered to lower the Argentine flag (which they did) and report to the BAS commander (which they did not). HMS Endurance (still very much on station in the Falkland Islands in her final season) was dispatched from Stanley with a party of Royal Marines to ensure the Argentine presence was evacuated. Argentina responded by deploying two frigates to support their landing ship in South Georgia. The Foreign Office suggested that the Argentine presence be regularised by having the proper temporary documentation stamped but Argentina opposed this.
Meanwhile Argentine Navy HQ was looking on aghast. They believed that British nuclear submarines were already on their way in response to the South Georgia crisis, which would ruin their plan for a 'soft invasion' that year. This was despite the weak response of Callaghan and David Owen to the invasion of Southern Thule in November 1976 where they took a full year to order a nuclear submarine and small surface task force (Operation Journeyman) to the South Atlantic. HMS Dreadnaught was instructed that if she was attacked by Anti-Submarine Weapons, she was to surface or withdraw at high speed submerged rather than exercise her right to self defence.
Rather than abandoning the invasion plan, they turned it into a 'hard' aggressive invasion and brought it forward to within 10 days (the submarines were estimated to arrive in 14 days). They invaded despite believing the Royal Navy was already on its way to stop them.
They landed at Stanley in the early hours of 2 April, launching attacks on Moody Brook Barracks (fortunately empty as the remaining Royal Marines had already taken up defensive positions at Government House) and the Governor's residence. HMS Endurance was caught between South Georgia and Falklands, unable to immediately influence events. Lightly armed, her Captain gave serious consideration to entering Port William inlet and using her ice-breaker bow to suicidally ram the Argentine landing ships. Fortunately discretion was the better part of valour and he retreated to the Antarctic ice shelf until help arrived.
In reality, the first British nuclear submarine was dispatched south on 30 March (although an earlier siting of HMS Superb leaving Gibraltar to head north had been misreported). At this time, the British Government still hoped to avoid further escalation. But those hopes were to be dashed as it became clear on 1 April that the Argentine naval task force was heading for the Falklands.
When the confirmation of the invasion reached London on 2 April, the Government was utterly despondent. In 1978, as Director of Navy Plans at the MOD, Sandy Woodward had been responsible for the official assessment of what could be done in the event of Argentina threatening and/or invading the Falkland Islands. The conclusion was there was nothing that could be done to defend the Islands from invasion short of permanently stationing a massive force on the islands and that once lost there would be no hope of recovering the islands.
But the First Sea Lord, Admiral Henry Leach, visited Thatcher in her office at Parliament and told her that not only could the Royal Navy do it but that we must do so lest "
in another few months we shall be living in a different country whose word counts for little". The army and the RAF were willing to go along if the Navy said it could be done.
Hence Thatcher was able to announce to Parliament that a task force was hastily being assembled over the Easter weekend to join up with Admiral Woodward's task group which was sailing from the Springtrain exercises at Gibraltar. The goal was to recover the islands by diplomatic, economic and if necessarily military means. European allies supported sanctions against Argentine while the declaration of the Maritime Exclusion Zone on 12 April marked the arrival of the first nuclear submarines (HMS Splendid and HMS Spartan).
While the main task force organised itself at Ascension Island, HMS Antrim led a small task group south to refuel HMS Endurance and recapture South Georgia (Operation Paraquet) with support from HMS Conqueror. Initial reconnaissance missions by special forces encountered weather difficulties. Further Argentine reinforcements were landed by submarine ARA Santa Fe, which also posed a significant threat to the British ships. As she departed South Georgia on the surface, she was spotted by British helicopters and attacked. Damage left her unable to submerge and she was forced to return to South Georgia where she was abandoned by her crew. Taking advantage of the situation, the British task group went for an immediate frontal assault, landing Royal Marines under cover of naval gun fire and forcing the surrender of the Argentine garrison without casualties to either side (this is what Thatcher's 'rejoice' statement was about - although an Argentine sailor was subsequently killed aboard Santa Fe when a British guard feared he was attempting to scuttle the submarine).
Al Haig, the US Secretary of State had been conducting shuttle diplomacy between Washington, London and Buenos Aries trying to find a peaceful outcome. He had a frustrating time as the Argentine foreign minister would say one thing when they met in person and then leave notes in Haig's pocket saying something completely reversing the position. His final version of the peace plan was first presented to and rejected by Argentina on 30 May. It was only at this point that Reagan came down on the British side (Haig and Jeane Kirkpatrick, the US Ambassador to the UN, had argued that the US should support Argentine while the Secretary of Defence and Pentagon argued in support of us).
The 200 mile Maritime Exclusion Zone became the Total Exclusion Zone on 30 April as the task force arrived. The TEZ had no legal effect and was really just a warning to neutral shipping and aircraft to stay out of the way. Argentina had already been warned via the Swiss Embassy on 23 April that the the MEZ did not represent a limit to hostilities and we reserved the right to respond against any Argentine military aircraft or vessel that threatened British forces.
Admiral Woodward was acutely aware of the strict timetable he had to operate to due to the onset of the southern winter and the ability to maintain the fleet at sea so far from support. He could not remain in the South Atlantic indefinitely. The Argentine forces (mostly Army conscripts after the Navy withdrew their professional marines) outnumbered the British landing force 3 to 1 whereas doctrine called for the landing force to have the 3 to 1 advantage. While British doctrine recognised that an unopposed landing away from the defences of Stanley was the best option, Argentina's doctrine expected a full frontal assault at Stanley.
Thus on 1 May, an RAF Vulcan bomber carried out Black Buck 1 to bomb the runway at Stanley airport and deny it to Argentine fast jets. This was followed by Sea Harrier attacks against the airfields at Stanley and Goose Green to reinforce the impression that British landings were underway. Argentine Air Force and Naval Aviation launched attacks against the British task group throughout 1 May, including claiming to have damaged, if not sunk, HMS Invincible as well as shooting down half a dozen Sea Harriers. In reality, there was no significant damage to the British ships and no British combat losses vs several Argentine aircraft shot down.
The Argentine Navy had also deployed as two task groups to launch a pincer attack against the British task force. To the north was the 25 de Mayo carrier group while the Belgrano led a smaller task group with two destroyer escorts as the southern arm of the pincer attack. Their plans to attack on 2 May had to be postponed due to insufficient wind for 25 de Mayo to launch her strike aircraft. She had a lucky escape as both HMS Splendid and Spartan had been hunting for her and only narrowly missed her in foggy weather.
Instead the 25 de Mayo group was detected by a Sea Harrier. Woodward couldn't afford to risk in his valuable Sea Harriers in a strike but nor could he accept being forced away from the Falklands as he had tasks to get on with. Fortunately at midday on 2 May, HMS Conqueror detected the Belgrano group prowling near the shallow (in submarine terms) Burdwood Bank, within striking range of the British task force. Woodward didn't have direct command over the submarines (controlled by Northwood HQ in London) and the Rules of Engagement at the time didn't allow Conqueror to immediately sink the Belgrano. But nonetheless he issued satellite orders to Conqueror to sink her. These orders were intercepted and removed from the satellite by Northwood before Conqueror saw them.
Recognising the urgency of the situation, the Fleet Commander and First Sea Lord sought an immediate change in the Rules of Engagement from the War Cabinet to sink the Belgrano. It was a decision made by the professionals of the Royal Navy. New orders were issued to Conqueror, which she received several hours later and she proceed to sink Belgrano.
HMS Sheffield was sunk by Exocet on 4 May. Despite combat being fully underway, peace talks continued into May. Initially Peru picked up Haig's peace proposals ('Haig in a poncho') and then when these were still rejected by Argentina, the UN General Secretary led talks with both sides right up until the British landings at San Carlos on 21 May.
It was most certainly not something that Thatcher planned nor lured Galtieri into. The entire war was a 'damn close run thing' and right up until the end there were fears we could still lose it. Several British ships were hit by Argentine bombs but the Argentine pilots had been forced to fly so low that the bombs did not have time to arm after release. The loss of either aircraft carrier or a major troopship would have ended the war. The fighting ashore was tough and as brutal as fighting the British Army had experienced since Korean, if not, the Second World War. Both the US and Soviet Union doubted we would succeed.
Unfortunately, ill-informed conspiracy theories spread by the likes of Clive Ponting, Diana Gould and Tam Dalyell still persist in some quarters.
I've said before that my grandparents benefit from the scheme, and indirectly so did we but I still think the policy was wrong and it what is causing so much of the cost of living crisis today.