The reputation of John Nott, who has died aged 92, will for ever be linked with the Falklands war of 1982. Nott was the defence secretary in Margaret Thatcher’s first administration and was extremely fortunate politically to survive one of Britain’s gravest postwar crises – yet it effectively ended his ministerial career.

Although the British taskforce retook the islands from Argentina after just 10 weeks’ occupation, Nott could not escape responsibility for his part in the government’s earlier decisions to reduce the islands’ protection, which had convinced the generals in Buenos Aires that they could launch their attack with impunity. Nor did he ever live down his ill-disguised pessimism about the taskforce’s chances of success. From being one of the Tories’ rising rightwing hopes and a prospective future chancellor, he left parliament for good a year after the war, with a knighthood; he was never awarded a peerage.

Nott was a somewhat forbidding figure with the air of a disapproving bank manager, a waspish tongue and a self-righteous and partisan manner – none of them attributes likely to inspire either the nation or its armed forces in time of national emergency. He had in fact calculated on an intermittent political career, sandwiching stints as an MP and minister between spells making money in business. Instead, his political career was over by the time he was 51 and he retired to the City, becoming chairman and chief executive of the merchant bank Lazard Brothers.

In that sense, his most memorable television appearance, a live interview with Robin Day in 1982 when he flounced out in an undignified huff on being referred to as a “here today, gone tomorrow” politician, was apposite. Indeed, 20 years later he entitled his autobiography Here Today, Gone Tomorrow (2002).

Born in Bromley. south-east London, John was the son of Phyllis (nee Francis) and Richard Nott, a rice broker from a West Country military family. On leaving Bradfield college, Berkshire, he served as a subaltern with the Gurkha Rifles during the Malayan emergency and was for a period the ADC to the commander-in-chief of British far east forces, before going to Trinity College, Cambridge, to study law and economics. He became president of the Cambridge Union and, on graduation, was called to the Bar, although he never practised as a lawyer. Instead he joined SG Warburg, the merchant bank, and remained there for eight years.

At Cambridge he met Miloska Sekol, a Slovenian refugee, who was studying English. The story went that Nott told her at their first meeting, in 1959, that he intended to marry her – a remarkable gesture from such an apparently staid and undashing figure, and an approach that appears to have taken her by surprise. She wrote in her diary that night: “What a cheek, how preposterous!” They married the same year.

Nott entered the Commons at the 1966 general election as MP for St Ives in Cornwall. He spent the rest of his life living in the county and promoting what he saw as its interests, calling for improved rail links west of Plymouth, and opposing incursions by French fishermen and the Anglo-French Concorde project. But it was as a bone-dry, rightwing economist, suspicious of the EU and pro-Commonwealth, that he made his mark: serving as an opposition economics spokesman and, after the Conservatives returned to power in 1970, becoming a junior Treasury minister, focusing on matters such as tax reform.

After Edward Heath’s 1974 defeat, however, he refused to become an opposition spokesman. He returned to the City as a consultant and to his Cornish estate, where he grew flowers commercially. Thatcher’s leadership was more to his liking and the rising Tory tide in favour of monetarism more ideologically congenial. “The party has almost found its soul again,” he told readers of the Daily Telegraph. He returned to the opposition frontbench, harrying the chancellor Denis Healey with a sharp wit.

Thatcher saw him as a kindred spirit, identified him as a rising star and, when the Tories returned to power in 1979, rewarded him by making him trade secretary. He naturally enthusiastically supported cuts in public spending, but also supported the expansion of London’s airports: a fourth terminal at Heathrow, a second runway at Gatwick and expansion at Stansted formed his most tangible legacy.

Then, in 1981, as the prime minister turned against the wets, Nott was moved to defence, to shake up the department and cut without squeamishness. He quickly decided that the priority was defence against the Soviet Union, not the promotion of worldwide, post-imperial pretensions, which was unfortunate in the light of what was to happen the following year in the South Atlantic. “Our first priority had to be credible deterrence from Soviet aggression on mainland Europe, decidedly not equipping ourselves for another Suez or post-colonial war,” he wrote later, and he proceeded to strengthen the army at the expense of the Royal Navy, targeting the service’s last aircraft carrier for closure.

Among the lesser cuts was a plan to scrap the gunboat Endurance, which guarded the Falklands. That, and the ruminations of his fellow rightwinger and Thatcherite rising star Nicholas Ridley that the islands were dispensable, sent a clear message to the junta. Had the Argentinian generals been a little more patient, Nott might single-handedly have made the taskforce that was subsequently launched impossible. As it was, he lost the navy minister to resignation and earned the lasting hostility of the first sea lord, Sir Henry Leach, who later wrote that he despised Nott’s performance.

Accordingly, when some Argentinian scrap metal merchants landed on South Georgia Island, sparking conflict, the government was taken by surprise. Nott later confessed that he had to look up where the Falkland Islands were on the globe in his office and he was immediately pessimistic of the chances of recovering them: it was Leach who seized the initiative to prove the navy’s worth and urged the prime minister, against her defence secretary’s advice and instincts, to mobilise an immediate taskforce to retake the islands. Nott’s insistence to MPs during that weekend’s emergency Commons debate that “no other country could have reacted so fast and the preparations have been in progress for several weeks. We were not unprepared” was therefore at best being economical with the truth.

When, 10 weeks later, the islands were retaken, albeit at considerable human cost, Nott received little of the credit and none of the glory within the party – that all went to Thatcher – or in the country, which was more inclined to credit the bravery and resilience of the troops than the triumphalism of politicians. His pretensions to succeed Howe as chancellor, or indeed any ambitions he might have harboured one day to follow Thatcher as prime minister, a possibility that had been occasionally mooted by some of the party’s zealouts, were at an end.

Before Thatcher’s post-Falklands general election landslide victory the following year, Nott chose to stand down as an MP. He could see the way the wind was blowing: the naval cuts were reversed. “The admirals have got their fucking gin palaces back,” he told friends. There was a certain degree of bitterness, too, even towards the prime minister herself. “The full cabinet was never more than a rubber stamp,” he said in a later BBC interview, accusing Thatcher of fostering a cult of personality: “Like all ambitious women, she thinks all men are feeble and that gentlemen are even more feeble.”

Back in the City, he accumulated directorships and money: chairman of Lazard, director of Royal Insurance, chairman of the food company Hillsdown Holdings, and of the clothing retailer Etam, and an adviser to the law firm Freshfields. He only occasionally intervened in politics: vociferously opposing the euro from an early stage and calling for early intervention in the 1990s Balkans crisis.

And he continued his battle with the pretensions of the navy: “Today’s defence policy has not been assisted by the Falklands experience,” he wrote in the Daily Telegraph in 2012. “It is still designed to prepare the Royal Navy for another Falklands … when technology, particularly air power, has moved into a new era … The Royal Navy’s future lies in a substantial number of well-armed modern frigates and destroyers, not two carriers, which are far too expensive to build, service and protect.”

He is survived by his wife and their children, Julian, William and Sasha.

• John William Frederic Nott, politician, born 1 February 1932; died 6 November 2024