FOREIGN Minister Bob Carr has accused Margaret Thatcher of making "unabashedly racist" comments when she warned him against large waves of Asian migration to Australia.

Senator Carr said while he respected Baroness Thatcher, who died on Monday aged 87, for some of her government's big policy decisions, he disagreed with her "on a hundred other things".

"I recall one conversation I had with her in her retirement where she said something that was unabashedly racist," Senator Carr told ABC television last night.

With Senator Carr's Malaysian-born wife Helena not far away, the former British PM warned Australia risked being taken over by Asian migrants.

"(She said) that if we allowed too much of it we'd see the natives of the land, the European settlers, overtaken by migrants," he said.

"I couldn't believe it."

The comments reminded Senator Carr that despite Baroness Thatcher's greatness on big policy issues "there was an old fashioned quality to her that was entirely out of touch and probably explained why her party removed her in the early 90s".