LONDON (REUTERS) - Britain has decided not to invite Argentine President Cristina Fernandez to Baroness Margaret Thatcher's funeral next week, a government source told Reuters on Thursday, a snub likely to deepen a bitter diplomatic dispute over the Falkland Islands.

The source said it would be normal protocol to invite representatives from every country with which Britain enjoys "normal" diplomatic relations to the funeral, but said Lady Thatcher's family had objected to Ms Fernandez being invited.

"It's about adhering to her family's wishes," the source said, adding that discussions were taking place to determine whether a more junior representative from Argentina could be invited instead.

Lady Thatcher, 87, who died on Monday, led Britain at the time of the 1982 Falklands war, ordering her armed forces to repel an Argentine invasion of the contested South Atlantic archipelago which Argentina calls Las Malvinas. Ms Fernandez has mounted an increasingly vocal campaign to renegotiate its sovereignty.

In a special parliamentary debate about her legacy on Wednesday, many MPs from her ruling Conservative party paid tribute to her leadership during the war and her funeral will have a Falklands theme with military personnel from units that fought in the conflict playing a prominent role.

The government is expected to release details about who will be attending next week's funeral later on Thursday morning. Her ceremonial funeral with military honours will begin with a procession through London to a service at St Paul's Cathedral.