Former British Prime Minister Margaret Thatcher on Friday urged the West to maintain military spending, strengthen the North Atlantic alliance and stand ready to respond to "dark forces" on the rise in the Soviet Union.

In her first major speech since leaving office, Thatcher hailed what she called twin U.S. victories over communism in the Cold War and over aggression in the Persian Gulf.She said the United States alone was capable of leading the North Atlantic Treaty Organization (NATO) and warned against creating any new all-European defense institution as part of a future federal Europe.

"If a European superstate were to be forged, it would almost certainly develop interests and attitudes at variance with those of America," she said in a 40-minute luncheon speech to hundreds of U.S. conservatives who repeatedly interrupted her with applause and laughter.

Even taking into account the help of Britain and other powers, the U.S.-led war to drive Iraq from Kuwait demonstrated "only one nation has the power to defend freedom and security in the world today," she said.

"That is, and will for the foreseeable future remain, the United States," said Thatcher, who was introduced to the audience by Federal Reserve Chairman Alan Greenspan and William Bennett, a former U.S. education secretary.

Thatcher, on a 10-day visit of the United States, was ousted 101 days ago by a revolt within her Conservative Party after 11 years as prime minister. On Thursday, she received the Medal of Freedom as President Bush praised her as "one of the greatest leaders of our time."

Touching on familiar themes, Thatcher said she still believed that Soviet President Mikhail Gorbachev was a reformer at heart, "and we have to go on doing business with him."

As prime minister, Thatcher was an early advocate of accepting Gorbachev as a reformer, calling him a man she could do business with.

But she cited growing evidence that prog-ress toward reform in the Soviet Union had been slowed, and possibly halted.

"Dark forces of reaction are on the rise," she said. She added that the West should make it clear to Gorbachev, who is under pressure from the military to halt liberalization, that the Soviet leader can count on help if he continues reforms.

"But the reverse of this is that any evidence of a return to repression must prompt from the West a swift and effective response," she added.

Thatcher, who has all but shunned the House of Commons since losing power and given no clue to her future plans, said the West must not overlook or condone what she called human rights abuses in the Soviet Union's independence-minded Baltic republics.

She said Eastern European members of the defunct Warsaw Pact should be given a new, special status in NATO - something short of full membership but well beyond observer status.