His revelation emerged in the first hour of giving evidence at the Hutton Inquiry, set up to probe the death of David Kelly.
Blair's historic appearance at the Royal Courts of Justice in The Strand, London, attracted the world's media as well as hundreds of anti-war protesters.
The protesters jeered loudly as Blair arrived, some chanting:"War criminal - Tony Blair".
Scores of other members of the public had queued overnight to guarantee a seat in the court, to watch the spectacle.
The prime minister's unprecedented appearance could be the beleaguered government's best chance yet to end speculations that it had exaggerated claims of Iraqi weapons to justify the war.
Jeers for London's Prime Minister
But the task is daunting and even the smooth-talking Blair could find the going rough, as he gives his account of the investigation into the apparent suicide of Kelly.
Allegations of 'sexing up' claims in a dossier about Saddam Hussein's weapons capabilities are still refusing to fade away and the government finds its reputation in virtual tatters.
It has further been dented by the death of David Kelly, the weapons' expert named as the source of a BBC story on how the government had exaggerated its claims.
For the British prime minister, the appearance before the inquiry could be a great opportunity to redeem himself or turn into a political disaster.