SYDNEY (AFP) - Australian Prime Minister Julia Gillard on Tuesday hailed Margaret Thatcher for helping shatter the glass ceiling for women in politics, calling her "history-making".

The "Iron Lady", a polarising figure who died on Monday following a stroke, was Britain's only woman premier, with Ms Gillard Australia's first and only female leader.

"Her service as the first female prime minister of the United Kingdom was a history-making achievement," Ms Gillard said in a statement.

"Her strength of conviction was recognised by her closest supporters and her strongest opponents.

"I extend my sincere condolences and those of my fellow Australians to her family and friends."

Former Australian prime minister Malcolm Fraser, who was in charge at the same time as Mrs Thatcher, called her one of Britain's greatest ever leaders.

"In some ways she was a mixture because she had emotional reactions but she also had a very powerful intellect," he told ABC radio.

"In discussions with her it was always important that you got on to the intellectual side ... and once you did, you found a powerful, rational argument for a course of action."

Mr Fraser first encountered Mrs Thatcher in 1969, when the two were education ministers for their countries.

"I didn't predict then that she would become one of Britain's greatest prime ministers," he said.

"I think she did enormous good for the British economy."