The Prime Minister, who first heard of the fiasco – in which eight people were killed – in an early morning BBC newsflash, sent the US President a message expressing great admiration for his courage.
In the Commons, as MPs raised the spectre of the action provoking world conflict, Foreign Secretary Sir Ian Gilmour refused to condemn the Americans.
“This is the time for allies to stick together and not criticise each other,” he told the House.
Deputy Shadow Foreign Secretary Peter Shore summer up the mood with the phrase: “The world is holding is breath this weekend.”
The crisis wiped £800 million off shares on the London Stock Exchange, and sent gold up 28 dollars an ounce and the dollar down.
The Prime Minister’s public stance and swift support of President Carter reportedly hid private fears and criticisms by ministers over his handling of the crisis.
Sir Ian was asked to guarantee that in no circumstances would Britain support the USA in military action, but he avoided giving an answer.
There was strong pressure for a Western summit meeting to clarify the whole situation and the move was to be given a full airing in Luxembourg when Common Market heads of government met.
What worried Britain “and the Nine” European nations was that they may be dragged into military action against their will for the sake of the unity of the alliance.
A group of Labour MPs, led by Mr Anthony Wedgwood Benn, had tabled a Commons motion calling on the government to withhold co-operation on economic sanctions against Iran unless Britain received a firm assurance that no armed force would be used to secure the release of the hostages.
There were rumblings from sides of the House over the US President’s lack of consultation over the abortive rescue. Whitehall took some pains to point out that Mrs Thatcher did not get the President’s message about what had happened until nearly two hours after hearing it on the radio.
Foreign Secretary Lord Carrington described the world situation as “very grave” - but he said that he did not believe the world was on the “slippery slope to war”.
Lord Carrington said if the raid had been a success “we would all be applauding and saying what a daring thing and how it has solved the problem. So I am sorry it did not succeed, and I am extremely sorry for President Carter that it did not succeed.”
Speaking on BBC Two’s Newsnight programme, Lord Carrington said world attention was now focusing on Iran, but the real danger was still in Russian invasion of Afghanistan.
Asked what Britain would do to deter Russia, he said that the United Kingdom had intervention forces and had to look at the “minor role” they might have to play “in circumstances which I hope will not arise”.
“I really do think it is important to maintain the solidarity of the West, otherwise the whole of the free world is going to be in danger,” he said.
FEARS FOR LIVES OF HOSTAGES
There was new anxiety for the American hostages in Iran after President Carter’s disastrous bid.
Iranian Foreign Minister Sadegh Ghotbzadeh called the failed mission an “act of war” and the Soviet Union condemned it as “armed provocation”.
The official Soviet news agency TASS denounced the move as reckless action that “balanced on the brink of madness”, and might have started a war.
The Ayatollah Khomeini, who declared a military alert, said after a day-long silence: “Carter still has not understood what kind of people he is playing with.
“Our people are the people of blood, and our school is the school of Jihad (holy war).”
The Iranian leader had added that President Carter was “ready to kill all people” for the sake of his re-election.
In a Tehran Radio message he said: “I have reportedly said that Carter, for the sake of his re-election as President of the Republic, is ready to commit any crime, even if that costs him all people. The evidence for this has and continued to appear.”
Mr Ghotbzadeh, who warned the Iranians would “set fire to the whole region” if such acts continued, said he had urged the militants holding the 50 hostages to show restraint.
He told the American broadcast network CBS: “So far nothing has happened, and I hope that will be the case. But we cannot guarantee (the hostages’) safety when the American government makes such foolish actions.
“I hope that this does not result in any disaster as far as the hostages are concerned.”
In a separate interview with French television he said: “If the students now do something, who will be responsible – the Iranian government or the American government?”
Meanwhile details emerged of the daring but unsuccessful rescue mission which had left eight Americans dead and several other injured.
US Defence Secretary Harold Brown had said the “longed-planned” operation was abandoned because three of eight helicopters involved had “mechanical malfunctions”.
The helicopters, together with volunteer crew and 90 men were enroute to a remote desert landing site about 200 miles from Tehran.
Mr Brown said 50 Iranians on a bus passing the desert site were held during the night, and released when the mission was abandoned.
The first helicopter fault caused the crew to land it in the desert. The crew was pickled up by another helicopter.
A second helicopter had trouble enroute, reversed direction and returned to he US Carrier Nimitz which was waiting in the Arabian Sea.
The third helicopter had severe hydraulic problems on landing at the desert strip, putting it out of commission.
At that point the operation was called off and those involved were evacuated in a transport plane.
The White House said eight US military personnel died in a collision between a helicopter and a C-130 transport plane. It happened almost in total darkness at the landing site, which was to have been used to refuel the helicopters for the flight to the Iranian capital.
They had left behind one non-functioning helicopter, four operating helicopters and the burning wreckage of the C-130 transport plane and a helicopter containing the bodies of the eight dead.
‘THE NEST OF ESPIONAGE’
News that the mission had failed brought thousands of jubilant Iranians into the streets around the American embassy in Tehran.
They were later to hear from Ayatollah Khomeini in a message read in state radio that “all hostages” would have been killed if the mission had reached the embassy.
He said: “Carter must know that if this group that if this group had attacked the nest of espionage, there would be no sign of them or the spies by now, and they would all have gone to hell.”
The revolutionary leader added: “I am warning Carter that if he commits another stupid act we won’t be able to control the the youth now holding the nest of espionage and the spies, and he will be responsible for their lives.”
He claimed the US casualties were much higher, he said: “He [Carter] says there are eight, but evidence show we know there are far more. There are dozens of them who have lost their lives, and dozens are wandering in the wilderness.”
WIFE OF HOSTAGE IN SHOCK
Mrs Louisa Kennedy, the wife of one of the American hostages being held in Tehran, said in London that she had been shocked to hear about the abortive rescue attempt to free to captives.
But she said she had expecting some sort rescue mission after pressure on the American government.
She would not say whether she though that President Carter had been right in ordering the mission.
She added, however: “I do not think covert action of this kind is necessarily reckless.”
Indeed it was noted that it “reflected the mood of the American people”.
Mrs Kennedy said that she was not worried that the flimsy lines of communications between herself and her husband, 49-year-old Embassy economics adviser, Mike Kennedy, might be cut off for a time.
Mrs Kennedy said that she would continue her European tour with the wives of the other hostages to win support for political pressure against Iran.