She was the Great White Whale and, as everyone recalled yesterday, she stuck out like a sore thumb in San Carlos Bay as she landed troops during the Falklands conflict.

Her then-captain Dennis Scott-Masson recalled: ''You just knew you were a very large white object, the biggest thing in San Carlos, the biggest thing in the Falklands really. You could not believe they would not manage to hit us.''

But the liner Canberra escaped unscathed to return to a hugely emotional welcome home.

Last night a commemorative dinner for veterans of the 1982 campaign was held on board at Southampton.

Guests included the Duke of York - who, as a Royal Navy helicopter pilot, flew on to one of the liner's two hastily-installed flight decks during the conflict - and Baroness Thatcher.

The former prime minister said: ''We could not have won unless the Merchant Navy had taken down all the soldiers and equipment.''

Standing alongside the P&O liner, which comes out of service in September, she pointed to the white sides and said there had not been time to paint them battleship grey.

The Falklands operation, which included the requisitioning of five other P&O ships and the Cunard liner QE2, had been complicated, said Baroness Thatcher, who claimed it had also transformed the standing of the country.

She said a Russian general told her no one thought the British would fight, and if they did they would lose.

Baroness Thatcher signed a painting depicting the Canberra in San Carlos Water.

The Canberra was requisitioned early in April 1982 and sailed for the South Atlantic on April 9. During her 94 days with the Task Force she landed most of the ground forces and also acted as a hospital ship and prisoner trooper ship.

Guests at last night's dinner included Admiral of the Fleet Lord Lewin, who was then Chief of Defence Staff, and Sir John 'Sandy' Woodward, Commander of the Task Force.

Widows of some of the troops killed in the campaign were present.

Lord Sterling, P&O chairman, told guests: ''Canberra encapsulates all that is best in spirit and character of the British people.''

After the dinner, the Duke of York took the salute as bands from the Royal Marines, Britannia Royal Naval College, the Parachute Regiment, the Royal Air Force and the pipes and drums of the Scots Guards Beat Retreat.

As well as her time in the Falklands, the dinner also paid tribute to the 44,807-ton Canberra as she retires.

Launched in March 1960, she has carried thousands of Britons emigrating to Australia and thousands more on cruises, sailing more than three million miles.

A decision about her future has still to be announced, but Captain Scott-Masson said he firmly believed she should be scrapped rather than sold.