Alastair Campbell's accounts of the New Labour years were filled with characteristically trenchant judgments. The rogueish eye of the late Tory politician Alan Clark gave his observations on political life a very readable edge. But when it comes to no-holds-barred waspishness, the Palme d'Or of Westminster diaries might be about to go to a woman born in the reign of Queen Victoria, who told it as she saw it 100 years ago.

Margot Asquith was the wife of the Liberal prime minister Herbert Henry Asquith, who led Britain into the first world war. Her diaries from 1914 to 1916, which are to be published by Oxford University Press, are beautifully written, luminously intelligent and memorably acid. Chris Mullin, Gyles Brandreth and the rest, eat your hearts out.

Writing during the first world war in the privacy of her bedroom, in a distinctive, feverish scrawl, Asquith did not hold back on her disdain for leading figures of the day. In 1915 she wrote of Winston Churchill, then in his 40s: "Winston's vanity is septic. He would die of blood poisoning if it were not for a great deal of red blood which circulates freely through his heart and stomach."

Inevitably David Lloyd George, who ousted her husband in 1916 as prime minister following military and political crises, is dismissed out of hand: "All he undertakes drops in chaos and confusion on a floor littered with covered tracks."

Lord Kitchener, secretary of state for war, is "slow and cumbersome in mind (totally ignorant of most things)". And for some of the heavyweight institutions of British society then and now, she has nothing but withering scorn.

Writing about the Tory party and Eton, later to serve as the alma mater of David Cameron and Boris Johnson, she comments: "There is no doubt, as Henry said, the Tory party just now in England has little or no real brains and a poor education. Eton, that beautiful, divine school, is rotten, full of prejudice, laziness and far too big and fashionable."

Asquith's diary is kept in the Bodleian Library, Oxford. Although historians have used it, the bulk of her entries have never been published. The diary has been edited by Michael Brock, the distinguished historian who died in April, having worked on it for years with his wife, Eleanor.

Mark Pottle, a fellow Oxford historian who helped prepare the edition, told the Observer that it was particularly significant because "these aren't sketches drawn from a distance", but from the centre of power.

He said of Margot's record of other people's comments: "Much detail … will be new to students of the period, and valuable – eg … the extent of Asquith's disillusionment with [Sir Edward] Grey [the foreign secretary], formerly one of his most admired colleagues, [or] the nuances in the cabinet's deliberations over Belgian neutrality …

"Margot's account is full of brilliant character sketches and idiosyncratic analysis, and the individuals that she describes, Winston, Lloyd George …the king, the kaiser, [Field Marshal Sir John] French, [Douglas] Haig [the controversial general], etc appear in a wholly original light."

He likened it to seeing new "arresting interpretations" of familiar figures by "a fine artist", adding: "For me, [the young] Churchill comes across as more reckless, adventurous, and vulnerable than I had previously seen him."

Born in 1864, Margot was the daughter of a Scottish industrialist and Liberal MP. She saw herself as "a sort of political clairvoyant", according to Brock.

Churchill particularly fascinated Margot, judging by how often he makes an appearance in the pages. "He is devoted to Clemmy [his wife, Clementine]", she observed, before adding " – but fonder of himself". Later she ridiculed him as "a dangerous maniac, so poor in character and judgment, so insolent and childish, I hardly even think him a danger".

By May 1915 her estimation had plummeted still further: "He has not merely bad judgment, but he has none. What a strange being! He really likes war. He would be quite damped if he were told now 'The war is over.' He has no imagination of the heart."

Only her husband escapes unscathed. She idolised Asquith as "by far the ablest, wisest, calmest and cleverest man in England". But when the war led to the division of his once great party, forcing him from office in 1916, she wrote despairingly: "We were turned out of Downing St."

In 1920 she published an autobiography, but according to experts, left most of the good stuff out. Pottle said: "This contemporary record gives the unvarnished truth – as Margot saw it."

Margot Asquith's Great War Diary, 1914-16 (OUP) will be published on 26 June.