Blair denied being "cozy" with Rupert Murdoch, whose News of the World tabloid had routinely hacked into the phones of public figures and crime victims. More than 50 people have been arrested in the hacking scandal.
Blair told the panel the issue wasn't that he and Britain's journalistic elite were too friendly, it was that he had to manage them carefully. He said he never challenged the influential British press because doing so would have plunged his administration into a drawn-out and politically damaging fight.
Blair's testimony was briefly interrupted when a heckler burst in through a secure corridor behind Leveson, shouting: "This man should be arrested for war crimes!" before being removed by security.
The Associated Press contributed to this report.