Newly-released documents from the time urge "no sporting contact with Argentina" and indicate international players felt "revulsion" at the thought of facing the country
The tournament, the 12th in history and the first to expand to 24 teams, was held in Spain and saw Italy defeat West Germany 3-1 in the final.
England, Scotland and Northern Ireland had all qualified for the competition, though none of the sides got beyond the second round.
However, a directive from Neil Macfarlane, a sports minister at the time, sent just days after the Argentine invasion of the Falklands, suggests that the home nations considered not participating.
It read: "I urge no sporting contact with Argentina at representative, club or individual level on British soil. This policy applies equally to all sporting fixtures in Argentina."
Mr Macfarlane reiterated his doubts in a letter to prime minister Margaret Thatcher the following month, insisting the players felt "revulsion" at the thought of competing against Argentina.
"Up until a week or 10 days ago I have taken the line that it was up to the Football Authorities to decide whether they should participate," he wrote.
"However, the loss of British life on HMS Sheffield and Sea Harriers has had a marked effect on some international footballers and some administrators. They feel revulsion at the prospect of playing in the same tournament as Argentina at this time."
Then-cabinet secretary Robert Armstrong later informed Mrs Thatcher that other nations would not support the UK's proposed boycott.
"In this case no other country would follow us in withdrawing from the World Cup," he wrote.
"Argentina would see British withdrawal not as putting any pressure on them but as an opportunity to make propaganda: the United Kingdom, not Argentina, would be the country set apart."