Britain announced last week that it would send some 370 extra troops to its zone of occupation in southern Iraq, taking the total to 8,900, to shore up security after the June 30 handover of sovereignty in Baghdad.
The reinforcement was far smaller than the 3,000 troops referred to in press reports in recent weeks.
For Blair, consistently US President George W. Bush's staunchest ally on Iraq, sending more troops carries some political risk, with local and EU elections looming in Britain that could bring out the anti-war vote.
But Blair denied that the announcement of a significant increase in the number of British troops in Iraq was being delayed for political reasons, saying he hoped to come to a decision "sometime in the next few weeks."
"There are all sorts of different options that are under consideration.
"The important thing is we've got to remain there until the job is done, although I hope and anticipate that in a year's time there will be a very substantial reduction of troops from where we are now," Blair added.
He said any scaling down of the British forces in Iraq would depend on the Iraqi security forces having the capability to provide sufficient security themselves.
Britain's newspapers have reported discontent among some British army officers that extra troops have not already been ordered to Iraq.
The Sunday Telegraph said the decision to "postpone" the announcement had infuriated British defence chiefs.
The paper quoted one unnamed senior officer as saying: "Military strategy has become subservient to political expediency. We want to get on with the task (of reinforcement), but we're being held back for political reasons -- namely (next week's) elections."
Blair warned of the danger of further attacks in Iraq, saying insurgents seeking to disrupt the handover had a simple strategy.
"It is literally to kill anybody who tries to make the country better, to assassinate anybody who is connected with the Iraqi government and to try to disrupt the UN process for the transition towards democracy.
"I think we are at the worst time now and in the months to come because around the time of the transition to Iraqi sovereignty these people will be attempting to do whatever they can to disrupt that process."
He denied there was any disagreement between Britain and the United States over whether Iraq's new government will have a power of veto over British and US forces after the June 30 restoration of Iraqi sovereignty.
Last week US Secretary of State Colin Powell seemed to contradict Blair, indicating that he did not expect US troops to be subject to any kind of veto from the interim government.
Blair said: "Obviously American and British troops have got to be able to protect themselves and take whatever measures are necessary to protect themselves.
"Once you have taken the political decision to go down a particular direction, or mount a particular operation, then obviously the conduct of that operation has got to remain with the generals and the troops on the ground."