Britain Denies Reagan Helped Stop PLO Talk : Britain Denies Bowing to U.S. on PLO Talks

Britain today denied that President Reagan played a role in the cancellation of a meeting between an official in Prime Minister Margaret Thatcher’s government and two Palestine Liberation Organization leaders.

The cancellation Monday of what would have been unprecedented British-PLO talks cheered Israel and Britain’s Jewish community but drew a chorus of criticism from Thatcher’s domestic opponents.

Denis Healey, foreign affairs spokesman for the opposition Labor Party and former defense minister, called the affair “the most stupendous diplomatic bungle.”

“When President Reagan says jump, Mrs. Thatcher says ‘How high,’ ” Healey declared, saying he suspected Washington orchestrated the cancellation, which followed last week’s hijacking of the Italian liner Achille Lauro by Palestinian gunmen and the killing of a 69-year-old American hostage.

But Foreign Office Minister Malcolm Rifkind denied it. “At no time did either President Reagan or any American official or any minister or anyone else in the United States ask the United Kingdom to reconsider the visit that was proposed.”