After her fall from power — which occurred 30 years ago this week — Margaret Thatcher frequently seemed intent on engaging in a very public settling of scores with those she felt had betrayed her.

But Sir Alfred Sherman was among the few with whom she appeared prepared to share the credit for her achievements in office. “We should never have defeated socialism if it hadn’t been for Sir Alfred,” she confidently declared in 2005.

It was an astute observation. For, alongside Sir Keith Joseph — her closest political ally both in the opposition years and government — Sir Alfred was perhaps more responsible than any other individual for helping to unleash the Thatcher revolution.

However, the third man of Thatcherism is now a somewhat forgotten figure; a startling omission given his critical role in laying its foundations.

Sir Alfred was a seemingly unlikely ally for Mrs Thatcher: a Jewish working-class former communist from London’s East End who had fought in the Spanish Civil War at the age of 17.

However, Sir Alfred who, in the unpromising terrain of 1950s socialist Israel, had become a fervent free-marketeer, had all the zeal of a convert. As he later argued, his earlier “communist decade” was “an essential ingredient” in his outlook and behaviour during the 1970s. It allowed him, Sir Alfred wrote, “to think big”, to believe that, aligned with the forces of history, a handful of people with sufficient faith could move mountains”.

In Sir Keith, he was to find a man who would come to share his faith. The pair first met in the mid-1960s while Sir Alfred was working for the Daily Telegraph. But it was in the early 1970s, as Ted Heath’s government – in which Sir Keith and Mrs Thatcher both served – was brought down by industrial unrest, that their relationship blossomed. Sir Alfred was appalled by the Heath government’s betrayal of the free-market “Selsdon manifesto” upon which it had been elected and stoked Sir Keith’s own deep unease.

After Mr Heath’s defeat, Sir Keith began his famed “conversion” to free-market Conservatism with a very public recantation of the Tories’ sins in office. The former Cabinet minister — gentle, erudite and prone to bouts of indecision — recognised that this conversion could never have happened without Sir Alfred, the man who gave him the courage of his convictions.

In what Sir Alfred later dubbed “the London Spring” of 1974, the pair began their assault on the post-war consensus of Keynesian economics, the welfare state and accommodation with the trade unions. In the coming months, Sir Alfred wrote, and Sir Keith delivered, a series of speeches which amounted to an eviscerating critique of the Tories’ attempt to “make semi-socialism work”.

The citadel from which the assault was launched was the Centre for Policy Studies, of which Sir Keith became the first chair and Mrs Thatcher his vice-chair. The brainchild of Sir Alfred, he aimed for the think-tank to “batter down the walls of Jericho”, challenging the institutions and orthodoxies which had governed post-war Britain, including the Conservative Party itself.

While it was Mrs Thatcher who ultimately ousted Mr Heath from the Conservative leadership in February 1975, it was Sir Keith and Sir Alfred who had fired the first shots against him and provided the intellectual underpinnings for her winning campaign.

Now installed as leader, Mrs Thatcher ordered that a “battle of ideas” be waged and charged the two men with leading it. Sir Alfred fired off a mountain of memos, letters and speeches to the new leader. The call was invariably for a more radical approach. Publicly, Sir Keith assumed the role of outrider, while Mrs Thatcher’s finely tuned political antennae judged the lay of the land. To work her way around Shadow Cabinet opposition, she often made policy through public pronouncements, giving added power to the words Sir Alfred helped write for her as she prepared dinner for them at her Flood Street home.

Behind the scenes, Sir Alfred crafted a new populist political strategy which called for the Tories to seek the “common ground”. This territory was distinct from the more commonly fought-over centre ground between the two parties, which, he suggested, had led the Conservatives to abandon defending popular values — “patriotism, the puritan ethic, Christianity, conventional family-based morality”. Occupying the common ground would allow the party to speak out on “national identity, law and order and scrounging”, he bluntly told Mrs Thatcher. Thus were her instinctive convictions given an electoral justification. With its appeal, in particular, to the previously Labour-voting, aspirational working-class, the “common ground” would prove a politically potent cocktail.

Unsurprisingly, the Tory old guard were aghast at this right-wing turn and viewed Sir Alfred as the principal driver of it. While anointing him a “genius”, Mrs Thatcher herself conceded that the cantankerous Sherman could also be “very difficult to get on with”. Nonetheless, the price was worth it. The speeches, seminars, books and pamphlets which poured forth from Sir Keith and Sir Alfred during this period, Mrs Thatcher later argued, helped to restore the right’s “intellectual self-confidence” and underlay her government’s later successes.

Sir Alfred’s understanding of the left also allowed him to see the need to cast Thatcherism as a radical, anti-establishment movement. That message, together with his assiduous wooing of disillusioned former Labour supporters, helped to win Mrs Thatcher some noteworthy converts, such as Kingsley Amis, Hugh Thomas and Paul Johnson.

But Sir Alfred’s search for converts was also accompanied by a hunt for heretics. He constantly warned Mrs Thatcher of “the enemies in the wings”, “the inveterate anti-Margareteers” and railed against any signs of backsliding.

After her victory in 1979 there was to be no Downing Street post or job as a ministerial adviser for Sir Alfred. Instead, he consoled himself with the role of keeper of the revolutionary flame. For a time, Sir Alfred – whom the Prime Minister affectionately christened “leader of the awkward squad” – remained a member of the Thatcher court, albeit a semi-detached one.

But by 1983, Sir Alfred had begun to outlive his use. When they were launching their insurrection in the 1970s, he was needed on the barricades, lobbing his verbal Molotov cocktails. With her party finally quiescent after her landslide victory, Mrs Thatcher was ready to declare victory. He may have helped her to achieve it, but Sir Alfred was not to enjoy its fruits.