Blair insisted the new powers, including house arrest, curfews and electronic tagging for terror suspects without trial, were necessary to protect Britain from attack.
Blair made a direct appeal to the main opposition Conservative Party to "stop messing around" with the legislation, as authorities began the process of freeing five foreign terrorist suspects locked up for three years without charge.
"We need these powers to defeat those who are planning and plotting terrorist activity in this country," Blair told BBC television. "We need to make sure that this country is properly protected against that terrorist threat."
Despite debating throughout the night, the government and opposition parties failed to reach a compromise on the Prevention of Terrorism Bill.
Opponents want to water down the legislation, saying it is flawed and would erode civil liberties. They refused to back down on their demands that the law expire within a year of passage and that the government must not impose the orders merely on the suspicions of intelligence services.
"The liberty of the individual must be protected, miscarriages of justice must be prevented"
Dominic Grieve, Conservative member of parliament
"The liberty of the individual must be protected, miscarriages of justice must be prevented," said Conservative Party lawmaker Dominic Grieve.
The government is fighting to pass the new law before Monday, when emergency legislation allowing it to detain foreign terror suspects indefinitely without trial expires.
Britain's highest court has ruled that law illegal. An Algerian man held for three years without charge was released on strict bail conditions late on Thursday. Five more men, including Muslim cleric Abu Qatada, left London's high security Belmarsh prison on Friday, officials said. The bail conditions under which they will be released would be set later on Friday, an official added.
Another suspect held at Broadmoor high-security hospital would appear at a special commission, where his bail conditions would also be set, officials said.
The British government has claimed that Qatada was the most significant extreme Islamist preacher in Britain and was an inspiration for terrorists including Mohammed Atta, the lead hijacker behind the 11 September attacks. A Spanish judge once called him "Usama bin Ladin's ambassador in Europe".
The government says that when the anti-terrorism law expires on 14 March, the bail orders will be unenforceable and insists parliament must grant it new powers urgently.
In parliament, the upper
house is opposing legislation
"We cannot have a situation in which the laws which are necessary to protect our country are not implemented," Blair added.
The prime minister already has the backing of the House of Commons, where he has a majority. But the House of Lords, where the Conservatives are the largest grouping, repeatedly overturned the government's proposals overnight on Thursday and into Friday.
The bill will bounce back and forth between the chambers, being amended and re-amended, until one side gives ground.
The new control orders would include restrictions on using the internet and telephone, curfews, house arrest and electronic tagging. The government says the law would be used sparingly and only against suspects who could not be tried in court because evidence against them would be too sensitive to reveal publicly.
Only a judge would be allowed to order house arrest. But in emergencies, the government has reserved the right for a minister to impose the lesser controls, as long as a judge is consulted within seven days.