Halls in Shrewsbury had offered the grey Chaumet evening bag in its Fine Art, Antiques and Jewellery Sale today – with an estimate of £4,000 to £6,000.

Strong interest meant that the bag sold for £7,000 – with the winning bidder coming from the South West of England.

Alexander Clement, a senior valuer at Halls, said they were pleased with the final price, adding that there had been two telephone bidders, internet interest, and a commission bid.

He said the bidding had gone down to one of the telephone bidders and the commission bid, with the hammer coming down at £7,000.

Mr Clement said: "It is slightly more than it made originally at Christie's when it was sold there so we are very pleased with that."

He added: "It is not every day you get to sell a piece of British cultural history of that sort and it certainly generated a lot of pre-sale interest."

The former Conservative Prime Minister was synonymous with the handbag – often described as "her weapon", and was rarely seen without one.

The Iron Lady described it as the only 'leak proof' place in Downing Street, while the term 'handbagging' entered the vocabulary as a playful description of the dressing down that Baroness Thatcher would mete out to political opponents and ministers who failed to live up to expectations.

Mr Clement described the bag, which features a cabochon sapphire set into the clasp, as "extraordinary".

It was sold in a 2015 auction, going for £6,800.

The box for the bag includes Baroness Thatcher's own handwritten note saying 'grey dress bag'.

Mr Clement said: "It is a really lovely little touch and a really lovely bonus to have that there because it is obviously one she used, perhaps sparingly because it is quite a glitzy evening bag, quite a lovely thing, not something that would be taken out daily, but it is fascinating to get a little insight into the world of Margaret Thatcher."