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EU leaders would be prepared to be flexible on freedom of movement of people to accommodate the UK after Brexit, Tony Blair has said.
He told the Today programme the EU was looking at reforms that would "make it much more comfortable for Britain" to fit within an "outer circle".
The ex-PM said he would not "disclose conversations I've had within Europe", but was not speaking "on a whim".
The government insists Brexit will give the UK greater control of its borders.
EU leaders have previously said the UK cannot stay in the single market, while limiting the free movement of people.
In a written article for his own institute, Mr Blair said senior figures had told him they were willing to consider changes to one of the key principles of membership of the single market.
"The French and Germans share some of the British worries, notably around immigration, and would compromise on freedom of movement."
'Damaging position'
But last week the EU's chief negotiator, Michel Barnier, said the freedom of movement of people, goods, services and capital - the key principles of the single market - were "indivisible".
Prime Minister Theresa May has pledged to control EU migration and has reiterated her commitment to reducing net migration to the tens of thousands.
She has said that outside the single market, and without rules on freedom of movement, the UK will be able to make its own decisions on immigration.
Mr Blair said leaving the single market was a "damaging position" shared by Labour and he urged the party's leadership to champion a "radically distinct" position on Europe.
"Rational consideration of the options would sensibly include the option of negotiating for Britain to stay within a Europe itself prepared to reform and meet us half way," he said.
"Reform is now on Europe's agenda. The European leaders, certainly from my discussions, are willing to consider changes to accommodate Britain, including around freedom of movement.
"Yet this option is excluded."
Mr Blair said Labour's vision of a "jobs first" Brexit outside the single market was a "contradiction in terms".
"So when people blithely say, 'We will get roughly the same terms as we do now with the single market,' I literally know no-one in the European system who believes this," he wrote.
He also said the Tories had lost their majority in the general election because large numbers of people voted to stop a "hard Brexit" and "rejected explicitly the mandate Theresa May was demanding".
The EU's chief negotiator, Michel Barnier, has said the freedom of movement of people, goods, services and capital are "indivisible".
Mr Blair's article is the latest intervention from the former prime minister, who has previously said Brexit was an issue he felt so strongly about, that it tempted him to return to politics.
However, Labour MP Frank Field, who backed Brexit, said he did not think Mr Blair was "a person to influence public opinion now".
He added: "Although he was a very successful Labour prime minister, the whole of his era now is encapsulated in the dissembling over the Iraq War.
"We're now set on the course of leaving [the EU]. We actually need a safe harbour to continue those negotiations when we're out.
"And I wouldn't actually be believing those people who are set on destroying our attempts to leave, who are now appearing as wolves in sheep's clothing."
(BBC)
