In a highly unusual intervention into British politics, the former prime minister declined to say whether he would campaign for the Labour leader at the next election expected in 2015.
Rejecting suggestions that it had been a mistake to open the door to migrants from new EU members in eastern Europe, Blair said: "People look back and say you should have done more to restrict particularly Eastern European immigration."
"I look back on that, and you can have a debate about it, but personally I think the Polish community contributes a lot to this country. In many ways immigrants do a lot for our country. They bring fresh energy, fresh initiative and I think it will be a sad day if we end up targeting them."
"Of course it has to be controlled, and illegal immigration has to be tackled head on. But overall I think immigration has been good for Britain and most immigrants have assimilated well. So don't make them a scapegoat for our problems."
Blair also insisted it was "obvious" that major changes needed to be made to sickness benefits and suggested the ageing population meant a fundamental reassessment of the post-war welfare state was necessary. His remarks will be seen as a swipe at Labour's stance on welfare.
The opposition has criticised almost all of Work and Pensions Secretary Iain Duncan Smith's attempts to trim the vast benefits bill, including increasing most working age benefits by only 1 per cent a year for the next three years.
Addressing a lunch attended by Westminster journalists, Blair appeared to contradict Miliband's insistence that there must be a new Press law following the Leveson Report into media standards.
He agreed with the main recommendations, and did not understand the "vehemence" of objections to legislation to back up a more effective newspaper watchdog.
But he added: "I think that the most important thing is whatever comes out of this is something that’s independent of government, Parliament and the media. How you do that, I am open-minded about."
In another apparent warning to Miliband, Blair sided with David Cameron and London Mayor Boris Johnson by backing their calls for an end to "banker bashing", saying the success of the City was critical to Britain's attempts to emerge from the economic mire.
London: In a thinly-veiled warning to party chief Ed Miliband over Labour's position on immigration, ex-British Prime Minister Tony Blair has asked the leader of the Opposition not make migrants a "scapegoat" for problems in Britain.
First Published: Wednesday, December 19, 2012, 18:54