History comes back to haunt us. Just over 20 years ago, the then British prime minister Margaret Thatcher told Soviet leader Mikhail Gorbachev: "Britain and western Europe are not interested in the unification of Germany. The words written in the Nato communique may sound different, but disregard them. We do not want the unification of Germany." She went on to say, inaccurately: "I can tell you that this is also the position of the US president." That's according to the Russian record made by one of Gorbachev's closest aides. A British note of the conversation, quoted in a volume of documents just published by Foreign Office historians, adds some fascinating new detail.

This was an act of spectacular disloyalty to an old, faithful, and important Nato ally. It showed a real lack of respect for the aspirations of the East Germans protesting on the streets, who would soon say clearly that their hopes of freedom – the political value with which Thatcher liked to most closely identify herself – would best be realised by unification with an already free German state. And it was very shortsighted.

She was not just expressing her worries in private to a western ally; she was expressing them directly to the man who had the power to stop German unification. The British note goes on: "Mr Gorbachev said that he could see what the prime minister was driving at. The Soviet Union understood the problem very well and she could be reassured. They did not want German reunification any more than Britain did. It was useful that the matter had been raised and that he and the prime minister knew each other's mind on this delicate subject."

Things are made no better by the fact that François Mitterrand and the French were conveying much the same message to Moscow. Gorbachev's close adviser, Anatoly Chernyaev, who made the record of the Thatcher conversation, notes in his diary on 9 October 1989 that Mitterrand's aide Jacques Attali "talked with us about a revival of a solid Franco-Soviet alliance, 'including military integration – camouflaged as the use of armies in the struggle against natural disasters'." Linking these French whispers to Thatcher's remarks, Chernyaev reflects: "In brief, they [that is, the French and the British] want to prevent this [German unification] with our hands."

At a witness seminar last week, organised by the Foreign Office historians, Hans-Dietrich Genscher, the West German foreign minister at that time, reacted with magnificent condescension. Obviously he was aware of Thatcher's opposition, he said, but he didn't worry too much about it, because he knew that so long as the Germans had the US behind them, the Brits would always come round in the end. Which of course they did, but not without squandering a heap of goodwill in Germany.

At the same seminar, William Waldegrave, who at that time was a junior Foreign Office minister, roundly declared that this was "one of the sorriest episodes in British diplomatic history". And the now-published records show that the Foreign Office, from the then foreign secretary Douglas Hurd down, did repeatedly warn (although not without some mandarin trimming along the way) that Thatcher's vocal opposition was impolitic, misguided and short-sighted. That is doubtless one reason why the Foreign Office is hurrying to publish the documents now, after just 20 years. Following the fall of the Berlin Wall, Hurd, Waldegrave, senior officials and diplomats would warn time and again against the folly of being an "ineffective brake" on German unification.

It is particularly interesting for me to read the internal pre-history of what became known as "the Chequers seminar" in March 1990, attended by six historians of Germany, of whom I was one. Since that famous or infamous event is represented only by a vivid but misleading summary by Thatcher's private secretary Charles Powell, which caused a scandal when it was leaked in Germany, it's worth saying again what several other participants have already put on record: the overwhelming message of all the historians present was that the Federal Republic, as it had proved itself over 40 years, must be trusted and supported in carrying through the unification of Germany in freedom.

I remember one electrifying moment when the veteran conservative historian Hugh Trevor-Roper – who had been in Germany immediately after the end of the second world war, interrogating senior Nazis for his classic account of the Last Days of Hitler – suddenly said, Prime Minister, if anyone had told us in 1945 that there was a chance of a Germany united in freedom, as a solid member of the west, we could not have believed our luck. And so we should welcome it, not resist it.

Twenty years on, we can see even more clearly how Trevor-Roper was right and Thatcher wrong. None of her nightmares have been realised. United Germany is not lording it over Europe, economically or any other way. Even a severe economic recession has not driven German voters to the far right. When Angela Merkel announces her new government, it will be a moderate liberal-conservative coalition of Christian Democrats and Free Democrats: the very model of a modern centrist democracy. Far from being an unstoppable force driving Europe towards a federal superstate, as Thatcher feared, this united Germany is far more comfortable being a sovereign state pursuing its national interests, as France does – in and through European institutions, but not subsumed by them. And German unification opened the door to European unification, through the eastward enlargement of the EU, which itself has made impossible the federal superstate of Tory Eurosceptic nightmare.

Even in this success story there are causes for concern. A political system originally designed to prevent a reversion to dictatorship has developed almost too many checks and balances, so necessary reform is difficult. Germany's special relationship with an authoritarian Russia is a European problem. But there are justified concerns about every major European state – and not least about Britain. Europe used to have sleepless nights over something called "the German question". Two decades later, a bigger worry should be the British question.

It's in Britain that the leader of a far-right, nationalist, xenophobic party will be appearing on a mainstream television show tonight. (A bad editorial call, by the way, but that's another story.) It's Britain that has a discredited parliament, a constitutional mess, the erosion of civil liberties and a chronic identity problem. It's Britain that still can't work out where it belongs in the world, and what kind of country it wants to be.

Then as now, the only thing you can be sure of – as wily old Genscher knew – is that London will ultimately go along with Washington. So I trust US Secretary of State Hillary Clinton gave a clear warning to shadow foreign secretary William Hague when they met in Washington yesterday, similar to the message an earlier US administration quietly delivered 20 years ago: "Don't be stupid. Don't marginalise yourselves in Europe." But how ridiculous and demeaning it is that we have to rely on the Americans to persuade British Conservatives to behave like halfway rational Europeans.