British taxpayers can well “afford” to contribute to the estimated £10 million cost of Baroness Thatcher's funeral, the Foreign Secretary William Hague said this morning, as MPs and peers gathered to debate her legacy.

Both Houses of Parliament will meet this afternoon in special session to allow tributes to be paid to the former prime minister.

MPs that were abroad at the time of her death and wanted to attend will be able to claim up to £3,750 to reimburse the cost of flying back.

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But Mr Hague, who was backed by Baroness Thatcher when he ran successfully for the party leadership in 1997, said the cost of funeral arrangements and other associated expenses were entirely appropriate considering what the former prime minister had contributed to Britain.

Speaking on BBC One's Breakfast programme, Mr Hague said: “It's right Parliament meets and commemorates such a leader of historic proportions in our country's history.

“She changed the course of our history and there have been many comments over the last few days from all corners of the political spectrum.

“When it comes to money, the rebate she negotiated for this country from the EU has brought us so far £75bn - which is twice the size of our annual defence budget.

“I think that puts money in perspective... so I think we can afford to contribute to a funeral.”

He said he believed that the biggest problem that many people on the left had with Baroness Thatcher was that "they could never beat her".

"They claimed to stand for millions of people but they could never get as many votes as Mrs Thatcher in an election," he said.

Baroness Thatcher's funeral is due to take place next Wednesday, with the ceremony in London's St Paul's Cathedral following a procession from Westminster.

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Her family is meeting an unspecified amount of the expense, thought to cover transport, flowers and the cremation, with the government funding the rest, including security.

Some of the former Conservative prime minister's opponents have queried the cost of the funeral and the expense of bringing Parliament back for a day during its Easter recess for MPs and peers to pay tribute and debate her legacy.

Preparations for Baroness Thatcher's funeral – codenamed True Blue – began nearly four years ago and it was decided early on that she would not receive a full state funeral.

A committee of senior government officials and representatives from Buckingham Palace as well as the police and parliamentary authorities was first convened back in 2009.

It was chaired by Sir Malcolm Ross, the Queen's former Master of the Royal Household, who organised the funerals of Diana, Princess of Wales, in 1997 and the Queen Mother in 2002.

At that stage the preparations were given the code name Iron Bridge in a play on the name for the Queen Mother's funeral plans which were known as Tay Bridge. The name was changed to True Blue when the Conservatives came back into power at the 2010 election.

Sir Malcolm initially acted as the go-between for the Government and Baroness Thatcher and her family, and the committee met every six months to update the plans. A member of the committee at the time who spoke to The Independent said that even at that early stage the location and status of the funeral was already agreed.

"The chairman was the link between the committee and the family and it was made clear that Baroness Thatcher and the family did not want a state funeral," they said. "The arrangements that have been announced so far are very much those which were ironed out at those early meetings. Even then the plan was to have a ceremonial funeral at St Paul's Cathedral similar to that of the Queen Mother."

There was also contingency planning for the types of demonstrations seen on Monday by opponents of Baroness Thatcher. "We always realised that her death would not necessarily evoke the same kind of reaction among everyone to say a Royal death. That's why the police were perhaps more involved in the early planning than they might otherwise have been."

When the Conservatives came into government the plans were reviewed by the incoming Cabinet Office minister Francis Maude, who personally took over the chairmanship of the committee. The codename given to the plans was also changed to "True Blue" to give it a more Conservative feel.

Interestingly, Mr Maude's father, Angus, was a key supporter of Baroness Thatcher when she made her bid for the Conservative party leadership in 1975. When she came to power in May 1979, he was appointed to the position of Paymaster General. It is a position which is now held by his son under David Cameron.

Cabinet Office sources said that since then, and as Baroness Thatcher's health deteriorated, the committee's meetings have become more frequent – convening once every couple of months.

A guest list for the funeral was drawn-up which is likely to include not just foreign dignitaries, politicians and friends and family of Baroness Thatcher but also a sizable representation from across the grassroots of the Conservative Party that was always her biggest base.

"This won't just be a national occasion it will be very much be a Conservative occasion," said a party source.

Since her death was announced on Monday the committee is now meeting every day. The membership has widened and now includes representatives from Downing Street, the Home Office, the security services and Lady Thatcher's former office as well as key figures from St Paul's and the Palace of Westminster.

It met today and discussed details including the funeral procession, invitations, matters of foreign protocol, the role of the military and the service at St Paul's.

More details will be released in the coming days but today it was announced that both the Queen and Duke of Edinburgh would attend the service in St Paul's – a decision which is said to have been taken after Lady Thatcher's death.

Next Tuesday her coffin will be moved to the Chapel of St Mary Undercroft in the Palace of Westminster where there will be a short service and where it will rest overnight. On Wednesday, the streets will be closed to traffic as Lady Thatcher's coffin travels by hearse to the church of St Clement Danes, the RAF Chapel, on the strand.

At the church, it will be transferred to a gun carriage drawn by the King's Troop Royal Artillery. It will then be borne in procession from St Clement Danes to St Paul's. The route will be lined by military personnel and members of the public who wish to pay their respects.

At St Paul's, there will be a guard of honour and military personnel and Chelsea Pensioners will line the steps of the cathedral. Her coffin will be carried into the cathedral by members of the armed forces.

After the service there will be a private cremation service. The final resting place of her ashes is likely to be alongside that of her husband, Sir Denis, just outside the Royal Hospital Chelsea.

On Saturday there will be a minute's silence at the Reading vs Liverpool Premier League match, which falls two days before the 24th anniversary of the Hillsborough disaster, in which 96 Liverpool supporters were crushed to death on the terraces at Sheffield Wednesday's ground.

Though Hillsborough families have welcomed plans for the silence, some are quick to distance the memorial from Thatcher's death.

Reading chairman John Madejski had earlier joined Wigan counterpart Dave Whelan in supporting a tribute to Baroness Thatcher at the weekend's matches.

Margaret Aspinall, chairwoman of the Hillsborough Family Support Group, said it would be a "mistake" to honour the former Prime Minister.

Mrs Aspinall, who lost her 18-year-old son, James, in the tragedy, said: "It's a terrible thing to speak ill of the dead, I know because it happened to my son and all the Hillsborough victims for 23 years.

"But if they do hold a minute's silence for Margaret Thatcher, I think they are making a big mistake.

"The fact is a lot of people would break that silence. Margaret Thatcher had contempt for football and its fans, in fact she was in favour of identity cards for all supporters."

In the hours and days which followed the disaster, the then Prime Minister held a number of meetings with police and other officials.

It remains a huge matter of concern for the families in their quest for answers that no notes or minutes were ever taken, or have survived if they were, during those meetings.