Clue: Letter penned by Thatcher (not the heartless, batty old ruler) (8)
Answer: HEPTARCH
Explanation: Definition: old ruler
An envelope ('penned by') of EP (abbreviation for Epistle, 'letter') in HTARCH, an anagram ('batty') of 'Tha[t]ch[e]r' minus TE ('not **T**h**E** heartless'), for one old ruler in seven.