Ronald Reagan blindsided Margaret Thatcher over the US invasion of the Commonwealth island of Grenada in 1983, giving her less than 12 hours' notice of the attack, Downing Street papers reveal.

The supposedly close cold war alliance between the two leaders was plunged into acrimony when the US president informed Downing Street of the invasion plan at 11pm the night before a force of 1,900 marines attacked the island, which had been taken over in a military coup led by Cuban-linked Marxists in October 1983.

Thatcher responded in the strongest language, telling Reagan in a late-night cable she was "deeply disturbed". Her foreign secretary, Geoffrey Howe, later said the episode was a "humiliation" that caused Thatcher "intense embarrassment".

The extraordinary tension between Reagan and Thatcher is set out in Downing Street files released under the 30-year rule. They reveal a flurry of late-night communications in which the leaders clashed bitterly over the response to the bloody military coup that had rocked Washington. Reagan feared the island would become a Soviet outpost in America's back yard and he complained of the construction of an airstrip, "which looked suspiciously suitable for military aircraft, including Soviet-built long-range bombers".

The dispute over US interventionism was not confined to the Caribbean. Thatcher also clashed with Reagan over his plans for a military strike against Lebanon following the 23 October truck bombing of a US marine barracks in Beirut, files show. She told him she was "frankly apprehensive about the retaliatory action you propose". Reagan backed down on that occasion, but did not do so in Grenada.

Maurice Bishop, the prime minister of the Caribbean island, had been killed along with five associates, and power seized by a military revolutionary council.

While America feared a Soviet advance in the region, British intelligence considered the coup "a severe setback to the revolutionary cause in the Caribbean", files show. On the eve of attack Thatcher wrote a note saying there was "no reason to think that military intervention is likely to take place". Her view was reinforced by Howe, who made a statement on Grenada to the Commons that made no mention of the imminent invasion, the first of its kind by America on a former British colony and a monarchy.

Reagan caught Thatcher so unawares that she had no chance to send the friendly "Dear Ron" response drafted after Reagan said he was giving "serious consideration" to an invasion. Before she could send it down the hotline, Reagan cabled again – just four hours later – to say the invasion was on. The surprise was made worse by the fact that Thatcher had been dining with the US ambassador that evening.

"I must tell you that the decision which you describe causes us the gravest concern," she finally told him. "I cannot conceal that I am deeply disturbed by your latest communication. You asked for my advice. I have set it out and hope that even at this late stage you will take it into account before events are irrevocable."

By now it was after midnight and a few minutes after Thatcher sent her note she spoke to Reagan by secure telephone line and urged him to consider her arguments very carefully. Reagan "undertook to do so but said: "We are already at zero," according to a memo from Thatcher's private secretary, John Coles. In other words, the US troops were ready to strike.

Reagan replied that the US was "increasingly concerned by Grenada's recent drift into the Soviet bloc … It is clear that Grenada has now been taken over by a group of leftist thugs who would likely align themselves with Cuba and the Soviet Union to an even greater degree than did the previous government."

Reagan's response was signed off with "warmest regards", but the US disregard for British concern was politically embarrassing for Downing Street.

The next day, as US helicopters and troop carriers descended on the island, Howe had to explain to parliament how Downing Street was blindsided, saying of the Americans: "We were given no indication that they favoured encouraging or joining in any military intervention."

The dispute rumbled on, and two weeks later, Thatcher met the US deputy secretary of state, Kenneth Dam. The Americans "expressed regret about the lack of any adequate consultation but did not accept they were wrong to take action", according to a note of the meeting. "The subsequent fracas has left bruises on both sides," the memo said.