Former Prime Minister Margaret Thatcher praised Dundee as a potential hub for smartwatch manufacturing, newly released documents show.

Government correspondence from 1983 shows that reclusive Norwegian billionaire Fred Olsen, owner of watchmaker Timex, informed Mrs Thatcher that his company was on the verge of a technological breakthrough.

In a private briefing for the then prime minister, he claimed that his company would soon pioneer a revolutionary concept: watches connected to computers and having screens that could display moving images.

This discovery led Mrs Thatcher to encourage Mr Olsen to choose Dundee as a base for the research, development and production of what were called “handheld computers”.

A February 1983 notice, seen by The Times, said: ‘Olsen foresees five years of difficulty before expansion.

‘He also foresees a revolutionary development in watches towards what he calls a hand-held instrument, bringing together watch, computer and perhaps even flat-screen TV technology.’

The note suggested there was the potential to develop ‘technology not yet available anywhere in the world’ in Dundee.

Timex came to Dundee in 1946, starting with 11 employees in a converted farm building. By the 1970s it had grown to become Dundee’s biggest employer, with 5,000 people on its books.

However, by the 1980s, demand for traditional mechanical watches fell and more than 1,000 workers were laid off.

The decline prompted Mrs Thatcher to write: ‘Dundee has established a clear lead in computer manufacturing.

I therefore ask that consideration be given to establishing Dundee as the lead Timex electronics company giving Dundee key responsibility worldwide for research and development in this area.’

The proposals did not materialize and Timex left Dundee in 1993 following an industrial dispute.