Rosemary Kennedy, John F. Kennedy's eldest sister, died Friday at the age of 86.

Her brother, U.S. Senator Edward Kennedy and her sisters were by her side, the family said in a statement.

"Rosemary was a lifelong jewel to every member of our family," the statement said.

Rosemary, top, Jean, bottom, and Robert Kennedy, right, are seen in this family photo taken in 1938. (AP file photo)

"From her earliest years, her mental retardation was a continuing inspiration to each of us and a powerful source of our family's commitment to do all we can to help all persons with disabilities live full and productive lives."

"We know our parents and our brothers and sister who have gone before us are welcoming her joyfully home to heaven," the family said.

Diagnosed with mild mental retardation as a child, her father, Joseph Kennedy, had his 23-year-old daughter undergo a lobotomy in 1941 for fear that she would not be able to control her adolescent behaviour and cause embarrassment for the family, writes Laurence Leamer in his book, "The Kennedy Women: The Saga of an American Family."

Kennedy's lobotomy failed and left her with serious learning disabilities, which required permanent institutionalization.

She had been a patient at St. Coletta School for Exceptional Children in Jefferson, Wis. since 1949.

Her sister, Eunice Shriver, recalls doctors assuring the family that the lobotomy, in which a patient's frontal lobes are scraped away, would relieve the disorders and calm her mood swings

Leamer wrote that the surgery reduced Kennedy to an infant-like state and unable to converse.

Kennedy was the inspiration for the Special Olympics spearheaded by her family.