Britain Bids Farewell to Thatcher

London staged its biggest political funeral in almost half a century Wednesday morning as Britain's governing elite joined the Queen and global leaders to bid farewell to former Prime Minister Margaret Thatcher, known as the "Iron Lady."

In an event similar to Winston Churchill's state funeral in 1965, Thatcher's coffin traveled on a horse-drawn gun carriage through the capital's streets, from the Houses of Parliament to the city's most famous cathedral, St. Paul's.

While police feared demonstrations might mar the occasion, the procession passed through the streets peacefully, greeted with either silence or polite applause.

More than 2,300 mourners attended the funeral, including 11 serving prime ministers from around the world, the British government's entire cabinet, two heads of state and 17 foreign ministers.

Thatcher, who headed Britain's government from 1979 to 1990 and led the Conservative Party for 15 years, died on April 8 after suffering a stroke.

Thatcher's granddaughter, Amanda, and Prime Minister David Cameron delivered readings at the service, while the Bishop of London, the Right Reverend Richard Chartres, spoke about her life and religious upbringing in his sermon.

Chartres said that the funeral was not the place to debate Thatcher's divisive legacy: "There is an important place for debating policies ... for assessing the impact of political decisions on the everyday lives of individuals and communities. Parliament held a frank debate last week—but here and today is neither the time nor the place."

Chancellor George Osborne was seen shedding a tear during the hourlong funeral.

Following the service, the former prime minister's coffin was taken to The Royal Hospital Chelsea, once again greeted by applause through the streets of London.

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Prime Minister David Cameron and his wife Samantha and former PM's John Major, Tony Blair a

Legacy

During her time in office, Thatcher divided the British public with her free-market policies, which sometimes wrought wrenching change on communities. Since her death last week, the British media and public have debated the legacy of Thatcherism—as well as whether a ceremonial funeral was fitting for the former prime minister.

Polls have shown that many are unhappy that the estimated 10 million pound ($15 million) bill for the funeral is being picked up by taxpayers, while some left-wing lawmakers say the pomp-filled funeral is excessive and amounts to a political ad for her ruling Conservative Party.

(Read More: Krugman Takes on Thatcher's Legacy as Debate Rages)

But her admirers argue that her historical profile merited such a funeral. She was the country's first and only woman premier, was Britain's longest-serving prime minister of the 20th century and won three general elections.

Speaking to BBC radio this morning on her political legacy, Cameron said, "We are all Thatcherites now."

The abiding domestic images of her leadership remain those of conflict: huge police confrontations with mass ranks of coal miners whose yearlong strike failed to save their pits and communities; Thatcher riding a tank in a white headscarf; and flames rising above Trafalgar Square in the riots over the deeply unpopular "poll tax" that led to her downfall.

Talking to CNBC this morning, Philip Shaw, chief economist at Investec, said, "A recent opinion poll from YouGov ... confirmed that she was the most divisive prime minister that we've had in modern times."

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The Ceremonial Funeral Of Former British Prime Minister Baroness Thatcher

Mark Gettleson, political analyst at PoliticsHome.com, added that Thatcher's policies, specifically relating to the industrial communities of the North, made many areas of northern Britain—such as Liverpool, Newcastle and Sheffield—anti-Conservative strongholds. To this day, there are few Conservative Party members of parliament in the North.

(Read More: Thatcher's Stock Market Was Best Boom in 50 Years)

But even her critics concede that, for better or for ill, she transformed the face of Britain.

In 1979, when she came to power, Britain was in the grip of a long post-war decline with notoriously troubled labor relations and low productivity, and was being outperformed by continental rivals France and Germany.

Data show she turned that around by boosting home ownership and the service industry, breaking the power of Britain's trade unions, and deregulating financial services.

"Does one think that the U.K. is a better place to do business in compared with the pre-Thatcher period?" Shaw asked. "I think the answer has to be yes. We can debate all the other facets and individual measures separately, but I think the big picture was that Margaret Thatcher was a big plus for the U.K. economy.

"One contentious policy was the rebalancing of the power between employers and trade unions, but arguably now the U.K. has a much better industrial relations record than it did before 1979," Shaw said.

But the price—growing inequality and the closure of large swathes of the country's industrial base —had parts of the country struggling to create new jobs and rebuild decimated communities, leaving a bitter taste that endures.

While many have lined the streets in silence, or in some cases applauded Thatcher's coffin, some protesters shouted "waste of money."