Records show that Councillor Roland Freeman proposed that the 1984 Olympics could be hosted in the run-down London docklands, when its most prominent competitor was thought to be Tehran, Iran.
A feasibility study was conducted in 1979 to look into the idea of constructing a national stadium on Royal Victoria Dock which could seat 70,000 people.
A new national lottery was another idea floated to assist with the financing of the event. But a note from Michael Heseltine to Mrs Thatcher implied the bid would make "no sense" economically.
Yet archive documents show that the unsuccessful Manchester bid for the 2000 Olympic games received strong government support. £53 million was provided to improve facilities before the nomination and an additional £2 million was allocated to support the bid.
Shots of the city taken on a clear day were taken to "scotch the myth of Manchester weather", but the Games were eventually awarded to Sydney.
Commenting on the material, Hugh Robertson, Minister for Sport and the Olympics, said that as London 2012 draws near, the documents "give us a chance to look back and appreciate how the Olympic movement has evolved over many years".
BBC: National Archives take visitors on Olympic journey
The dates mentioned, though, flag a few questions. 1979 would have been far too late for the UK to start thinking about a 1984 bid. I wonder if they are mistaken, and it was actually 1988 that was being investigated.
Interesting that Thatcher kyboshed it. Almost the same as Oz when Sydney was investigating a 1988 bid - but was stymied when then PM Fraser said there was no value in bidding on a games (this WAS the dark times following Munich and Montreal, after all).