London mayor Boris Johnson on Wednesday hailed greed as a "valuable spur to economic activity" as he spelt out his vision of modern Thatcherism at a speech honouring the former prime minister.

Delivering the Centre for Policy Studies' annual Margaret Thatcher lecture, Johnson called for the return of selective schools in a message apparently aimed at the right-wing of the Conservative Party, which many believe he hopes to lead one day.

"I don't believe that economic equality is possible; indeed some measure of inequality is essential for the spirit of envy and keeping up with the Joneses that is, like greed, a valuable spur to economic activity," he said.

Thatcher's policy of deregulation and privatisation sparked an economic boom in 1980s Britain, but recession struck in the early 1990s.

Addressing comparisons between himself and the former leader, who died in April, aged 87, Johnson said: "I realise that there may be some confusion in my prescriptions between what I would do, what Maggie would do, and what the government is about to do or is indeed already doing.

"I don't think it much matters, because the three are likely to turn out to be one and the same."

But he argued that Thatcherism needed to be modernised.

"I hope there is no return to the spirit of loadsamoney heartlessness -- figuratively riffling banknotes under the noses of the homeless," he stressed.

"If there is to be a boom in the 20-teens, I hope it is one that is marked by a genuine sense of community and acts of prodigious philanthropy."

Turning to education, the mayor said that Thatcher "would have found a way" to reintroduce selective grammar schools.

"I hope that she would have found some way of making far wider use of that most powerful utensil of academic improvement -- and that is academic competition between children themselves," he said. -- AFP