The UK’s former prime minister Tony Blair has told MPs that he did not block talks aimed at securing Libyan compensation for victims of IRA members who used Libyan weapons.

In a letter to the Northern Ireland Affairs Committee in the House of Commons, Mr Blair said the attempt to “implicate me in deliberately trying to stop IRA victims receiving compensation is utterly without foundation and wrong”.

He told the committee: “I appreciate the opportunity you have provided me to set the record straight.”

Northern Ireland politicians have questioned whether the UK government sought compensation for IRA victims along the lines of Libya’s $1.5 billion pay-out to victims of the Lockerbie bombing.

Mr Blair has been accused of intervening in 2008 talks between the US and Libya in order to protect UK trade deals with Libya.

However, he told MPs that he “never tried to get the Americans to exclude the claims of IRA victims” and did not raise the issue with President George Bush.

The Northern Ireland Affairs Committee is now exploring the possibility of compensating the families of IRA victims using the frozen assets of former Libyan leader Colonel Muammar Gaddafi.

Mr Blair’s letter states: “The issue of compensation for the victims of IRA terrorism made possible by the provision of material by the Gaddafi regime was not an issue raised with me, as far as I am aware.

“And of course a statutory compensation scheme for victims of terrorism in Northern Ireland was already in existence, having been set up by a previous government.

“The needs of victims were therefore being addressed through the existing structures and mechanisms.”

Mr Blair has been invited to give further oral evidence to the committee.

Jason McCue, senior partner at McCue & Partners, is representing a number of families of victims of IRA attacks in which Libyan Semtex explosives were used.

He said: “On behalf of UK victims of Libyan Semtex, we welcome the opportunity for clarification that Mr Blair’s assistance will provide.”