After Margaret Kearney Taylor died her friends couldn't believe what they discovered. This graceful Irish emigre, who owned the Embassy tea salon on Paseo de la Castellana, the magnificent avenue that cuts across Madrid, turned out to have been one of the leaders of a covert wartime operation that helped Allied servicemen and Jewish refugees escape Nazi-occupied Europe. It brought them through the Spanish capital, on to ports in Gibraltar and Portugal and, ultimately, to freedom in the United States, Britain and Palestine.

Her old cohort couldn't believe that Margarita, as they called her, was a key figure in the plot. David Butler, a volunteer at the British Cemetery in Madrid, was sent newspaper clippings from England about a book published in Spain in 2003. It was by a Spanish woman named Patricia Martínez de Vicente, who discovered, from his papers after his death years later, that her father was a wartime agent for Britain's intelligence services.

“I showed the clippings,” he says, “to elderly ladies: ‘Oh, that’s not possible! What will people think of next? Honestly, thinking of a sensationalist story like that! Imagine Margaret Taylor being up to that! Ho ho, ho.’ They laughed it off.

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“Yet these same ladies had been part of the clerical staff of what they euphemistically called the passport section in the British embassy, which was falsifying passports with usurped names – which was the mainstay of Margaret Taylor’s operation, as revealed in this book, but no one believed it, among the very people being customers of hers at the Embassy tea room.”

Why were they so surprised?

“Because Margaret Taylor was so elegant,” she replies, “so calm, so unflappable, so genteel, and knew how to deal with people, and they just didn’t connect it, that this woman could have been a British agent. They couldn’t believe it. No, no, no.”

Taylor, who died in 1982, had moved to Madrid in the late 1920s. She had lived beforehand in Paris, where her only daughter, Consuelo, was born in 1924. Consuelo's father was a Spanish diplomat named José María Linares Rivas, who acted as counsel to the 1920s Spanish dictator Miguel Primo de Rivera.

Taylor won a paternity case against Linares Rivas so their illegitimate daughter could take his name. The legal battle was an important clue to Taylor’s character and motivations, as I explain in my Documentary on One: Tearoom, Taylor, Saviour, Spy, which is RTÉ Radio 1 this weekend. She kept several aspects of her private life secret.

Aristocrats and cocktails

The Embassy salon, which she founded in 1931, provided a discreet meeting place for the aristocratic ladies of Madrid to take tea and cakes at 5pm. It was a first in the city, modelled on the salons of Paris and London, with the new-fangled option, imported from the United States, of ordering a cocktail later in the evening.

Her personality made her the perfect host. The writer Jimmy Burns, whose father was a British spy in Madrid during the war, was a family friend. He recalls visiting her tea room as a child.

“I always remember this quite small, delicately framed lady with beginning- to-be-bleached hair, with very Celtic, blueish eyes. You stepped into the Embassy on Castellana and you were in a completely different world. This eccentric woman presided over this almost theatrical scene.

“She was a mixture of reserved and focused. She ran her establishment with great discipline, great panache, in the sense that she always made her clients feel very welcome. I wouldn’t say she was a snob – luckily, she had too much Irish in her for that – but she clearly had a way with the Spanish aristocracy.”

Taylor built up a coterie of friends drawn from the elite of Spanish society, including Frederika, queen mother of Greece (whose daughter Sofia became queen of Spain after the death of the fascist dictator General Francisco Franco, in 1975); the Stroganoffs, a family of exiled Russian nobles; and Ramón Serrano Suñer, Franco's brother-in-law, his wartime foreign minister and the most ardent Nazi sympathiser in his regime.

“Serrano Suñer was the guy who received Himmler when he visited Madrid in 1940. He’s seen in all the photographs with him,” says Burns. “He clearly had Franco’s ear on certain matters. He was also a very good-looking chap. Margarita was a good-looking lady by all accounts in her youth and had a way with men, particularly aristocrats, powerful men.

“She struck a good relationship with Ramón Serrano Suñer. He would have been an important guy to underline the sense of subtle protection the Embassy enjoyed from the Franco regime, which undoubtedly protected the tea room from a unilateral raid by the Nazis.”

The Embassy’s location was remarkable. Only a small Lutheran church stood between its front door and the entrance to the German embassy, which was festooned with swastika flags. During the war the German embassy was headquarters for Abwehr, the Nazis’ intelligence unit, which had about 1,000 spies in the Spanish capital.

Taylor operated a safe house for escapees in her apartment above the tea salon – right under the German’s noses, playing a part in helping to save 30,000 evacuees smuggled through neutral Spain during the war.

"Can you imagine to have that courage?" says Adriana Rivera Sarmiento, the present owner of the tea room, who called Taylor "Granny" as a child. "To have this confidence, to have this charade right here and the German embassy up the street."

Concentration camp

Many of the refugees who were taken to Taylor’s safe house were sprung from a concentration camp at Miranda de Ebro, 330km north of Madrid, near Bilbao, using faked medical records, and invented illnesses such as typhus or tuberculosis, to secure their release. Spanish Red Cross ambulances or British embassy cars, whose drivers had diplomatic immunity, were used to transport the escapees around Spain. Some of the escape routes were named after British car manufacturers of the day, such as Austin, Morris and Sunbeam. Once the escapees were holed up in Taylor’s apartment the British embassy gave them clothes and ID cards.

Benjamin Hirsch was one of the Jewish survivors who were spirited through Madrid in August 1941, en route to the United States, where he became an architect; he lives today in Atlanta.

Hirsch fled Germany in November 1938, after the Kristallnacht pogrom, along with four siblings. It took him almost three years, spending most of the early years of the war in Paris, to get as far as the Spanish border. He was eight years old by this time.

“We got to Marseilles on the back of a truck,” he says, “and from Marseilles we took a train, which was going through the Pyrenees. Instead of going straight to Madrid we went and stopped along at every little station along the way, so we would get to Madrid after dark, so the spies would not see us. Whoever was planning it thought of everything.

“This is a really weird thing. Here we are as kids, ranging from eight to 12. [A guide tells us]: ‘You guys look like a bunch of ragamuffin Jewish emigrants. They’re going to spot you. They’ll know exactly who you are.’ He pulls a sandwich out of a bag, and he hands it to one of the boys in our group. He says, ‘Now what are you going to do with this?’

“ ‘I’m going to eat half and put the other half in my pocket. I never know when I’m going to eat again,’ the boy says. ‘That’s exactly what you can’t do,’ he says. ‘Jews do that. We’re going to give you a lunch every day, and you can eat to your heart’s content, but you can’t save a thing. You cannot put food in your pocket.’ It was very scary.”

Hirsch’s mother and his younger brother and sister were killed in Auschwitz, in 1943. His father died in Buchenwald, in 1942. Taylor died 40 years later, aged 92. She bequeathed the Embassy tea room to her staff. It was an extraordinary gesture from an extraordinary person.

Documentary on One: Tearoom, Taylor, Saviour, Spy is on RTÉ Radio 1 at 2pm on Saturday and at 7pm on Sunday. rte.ie/doconone