Blair linked to Mid East Tesco deal

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But discussions between the former Prime Minister - who is a peace envoy to the region - and the supermarket chain ended after the two sides failed to agree terms, the Mail on Sunday said.

Mr Blair's proposed role for Tesco would apparently have been to act as a figurehead for the group's bid to break into the Middle East market.

Tesco is said to have wanted Mr Blair to use his international political and diplomatic connections to "open doors".

Responding to the allegations, a spokesman for Mr Blair said: "Tesco is a great British company. However, Tony Blair and Tony Blair Associates have never done any work on behalf of Tesco. Tony Blair does not have any commercial relationship with Tesco and has not made any representations on their behalf.

"The vast majority of Mr Blair's time is taken up by his unpaid activities, principally his role as Quartet Representative (for the United Nations, European Union, Russia and United States) in the Middle East, advocating on issues such as climate change and Africa and with the work of his faith and sports foundations."

Mr Blair's business venture, Tony Blair Associates, was formed for him to provide advice on political and economic trends to various bodies such as governments and companies.

A statement from Tesco said: "We wouldn't comment on which advisers we may or may not talk to or speculation about potential markets for Tesco."

According to the Mail on Sunday, the talks were not thought to have broken down over the issue of money, but the reason was not given.

Tesco has more than 2,000 stores in the UK and has also been expanding rapidly overseas, including into the US, China and South Korea. Its chief executive Sir Terry Leahy has been a Government adviser, and was knighted under Mr Blair's premiership.