The writer and Thatcher were often at logger-heads politically. However, he was always grateful to her for the firm stance she took in reaction to the threat on his life from Iran following the publication of his novel The Satanic Verses in 1988, when she provided him with police protection.
Speaking on the HBO show Real Time With Bill Maher, Rushdie also described a risqué encoun- ter between Thatcher and Christopher Hitchens, the famously outspoken commentator who died in 2011.
Rushdie said: "Margaret Thatcher, by the way, spanked Christopher Hitchens. She heard Christopher had written something she didn't like, and she met him at a party conference, and she said to him, 'You've been a naughty boy, haven't you?'
"And he said, 'Well, yes, Prime Minister, I suppose I have'.
"And she said, 'You'd better bend over'. She made him bend over, and she spanked him with a rolled-up magazine."
Rushdie has previously spoken about the softer side of Thatcher. Following her death aged 87 in 2013, he said: "She would tap you on the arm and say, 'everything OK?'
"I hadn't expected that touch of tenderness."