Ex-Cabinet minister Clare Short may be disciplined for calling for a hung Parliament after the next election.
Ms Short led backbench criticism of the most recent war in Iraq
Ms Short said she would not stand again for the Commons and attacked government policy - an attack Labour Chief Whip Jacqui Smith said was "unacceptable".
The MP could lose the Labour whip as a result, she added. Ms Short shrugged off the threat of punishment and said it would be "fine" if that happened.
Mr Blair would not comment on her attack when interviewed by BBC News 24.
But he referred to criticism of his administration in general terms by saying: "Every time you make changes, people will say it's end of the National Health Service or it's the end of state schools.
"Then you put the changes and a few years later, people treat it as the norm."
Ms Short partly blamed the prime minister's foreign policy for her decision to stand down as Labour MP for Birmingham Ladywood.
"I have reached a stage where I am profoundly ashamed of the government," she said.
She told the BBC the option of standing as an independent was "improbable, but who knows".
She said she would campaign for a hung Parliament, where no party had overall control.
Labour should hold a third of the seats, the Tories a third and the rest should be made up of Greens and other parties, the 60-year-old claimed.
"I think our political system is in trouble," she said.
"Nothing is properly scrutinised, the arrogance and concentration of power in No 10 also creates incompetence in decision-making, and our foreign policy is exacerbating the problems of the world.
"The only answer is to get a Parliament that's more reflective of opinion in the country."
'Fast track action'
Ms Smith - in charge of discipline within the Labour Party - condemned Ms Short in a statement.
"Clare Short's public admission that she would welcome the defeat of her Labour parliamentary colleagues and the Labour government at the next general election are completely unacceptable," she said.
"As Chief Whip, I can recommend the whip be withdrawn from parliamentary colleagues or suspend them from the whip.
"However, Clare Short's comments and actions are so serious, I am now taking the matter further by referring her conduct to the party chair and the general secretary of the Labour Party."
The most serious penalty that could be imposed is expulsion from the party.
But Ms Short insisted she was determined to do what was right.
"The chief whip has it in her power to remove the whip - if she does then that's fine," she told Sky News.
Labour's MP in Walsall North, David Winnick, said Ms Short could not continue to demand a hung Parliament, however.
"You can't very well actively campaign for your colleagues to be defeated, Labour MPs to be defeated, at the next election, and then expect to stand as a candidate at the forthcoming general election," he told BBC Radio 4's PM programme.
Ms Short quit as international development secretary in 2003 in protest at the post-invasion plans for Iraq and is now set to stop being a Labour MP.
She has resigned from the Labour Party front bench three times - twice over the Gulf Wars and once because of the prevention of terrorism laws.
The way she resigned from the Cabinet in 2003 was seen as damaging her standing with the Labour left.
Rather than quitting before the conflict, like Cabinet colleague Robin Cook, she publicly agonised over its rights and wrongs.
She only left her post as international development secretary once the main hostilities ended.
She was one of a number of MPs who demanded Parliament be recalled last month to discuss the crisis in the Middle East.