Blair makes admission over economy

Former Prime Minister Tony Blair has said he accepts some responsibility for the state of Britain's economy.

The ex-Labour leader admitted his Government had not fully understood the impact economic integration could have.

But, in an apparent warning to current party leader Ed Miliband who wants Britain's banks dramatically reined in, he warned a "vibrant" financial sector was important for the UK.

"In respect of the economy, yes, of course, everybody who was in power in the period bears a certain responsibility," he told the Murnaghan programme on Sky News.

"On the other hand I think what happened, and this is really important for people to understand, this global financial crisis was the product of a whole new way that the financial and banking sector has been working in this past 20 or 30 years where you have got this deep integration of the global economy and where you have a lot of financial instruments that were created whose impact people didn't properly understand."

Asked if that meant Labour did not fully understand it while he was in power, he replied: "No, we didn't."

He added: "A vibrant financial sector is also a very important part of our future. Take the necessary steps but realise that thriving and healthy banking sector is a major part of the modern British economy and will also be so."

Mr Blair who has served as a Middle East envoy for the "Quartet" - made up of the United Nations, United States, European Union and Russia - since leaving office, is keen to return to domestic politics.

He said: "I feel I have got something to contribute to the debates that are going on in the country and I want to do that.

"We have got an extraordinary and uncertain unpredictable situation today. I think we are living through an era of almost uniquely low predictability, economically and politically."