The former prime minister says Labour’s current position under the leadership of Jeremy Corbyn is a “tragedy” and the party no longer aspires to govern the country.
In an article for the Spectator, Mr Blair, who won three general elections as Labour leader, defended criticism of his time in office.
He said: “Many – especially in today’s Labour party – felt we lost our way in government. I feel we found it.
“But I accept in the process we failed to convince enough people that the true progressives are always the modernisers, not because they discard principle but because they have the courage to adhere to it when confronted with reality.”
He added: “Of course we made mistakes. But we were a radical reforming government. And we tried to put the moral purpose of the Labour party into practice, the only sort of morality worth very much.
“Right now we’re in danger of not asking the right questions, never mind failing to get the right answers.
“All of it is about applying values with an open mind; not boasting of our values as a way of avoiding the hard thinking the changing world insists upon.”
Mr Blair said all sections of the party, including those critical of New Labour, “which support the notion of the Labour party as a party aspiring to govern, rather than as a fringe protest movement, agree on the tragedy of the Labour party’s current position”.
He said his decision to join the US-led “war on terror” was “made not in defiance of progressive politics but in furtherance of them”.
“But the essential position we occupied in British politics retained appeal, which is why we not only won a third term in 2005, we were never in any real danger of not getting it.”
Mr Corbyn, a former chair of Stop the War, is due to attend a fundraising event for the protest group on Friday despite growing criticism from some Labour MPs.
Former frontbencher Tristram Hunt has branded the group “a disreputable organisation”, while former shadow Northern Ireland secretary Ivan Lewis said it was “shameful” that the coalition published a blog comparing jihadis in Syria with the International Brigades who fought fascism in Spain in the 1930s.
A Stop the War statement said: “Tristram Hunt’s attack is unfounded and unjustified.”
Other statements made by the group have described Britain as “the most aggressive country in Europe over the last 15 years” and said Labour MPs’ concerns about aggressive lobbying from anti-war campaigners as “whining complaints”.
Other notorious editorials that have appeared on the group’s website include a piece written in the aftermath of the Paris attacks which stated that France had “reaped the whirlwind” of western intervention in the Middle East.
The blog was later replaced by one saying that there could be “absolutely no justification” for the massacre in Paris last month.
Green MP Caroline Lucas revealed this week that she had “stepped back” from involvement in the group due to a busy schedule and “in light of some recent STWC positions that she didn’t support”.
But Mr Corbyn has confirmed he will attend the event on Friday.
A spokesman said: “The anti-war movement has been a vital democratic campaign which organised the biggest demonstrations in British history and has repeatedly called it right over 14 years of disastrous wars in the wider Middle East.
“Jeremy Corbyn rejects any form of abuse in politics from any quarter. But he will not accept attempts to portray campaigning, lobbying and protest as somehow beyond the pale. In fact, it’s at the heart of democracy.”
The Labour leader courted fresh controversy after quoting Albanian dictator Enver Hoxha at a Labour Christmas party.
Mr Corbyn is said to have described Hoxha, a Stalinist who executed and imprisoned opponents, as a “tough ruler” at the private event.
He reportedly told staff: “This year will be tougher than last year”, a reference to Hoxha’s New Year message to the Albanian people in 1967, when the dictator warned: “This year will be harder than last year. On the other hand, it will be easier than next year.”
Mr Corbyn’s remark, which comes after shadow chancellor John McDonnell tossed a copy of Chairman Mao’s red book at George Osborne, was simply a “humorous reference”, according to Labour sources.