Mr Blair said choice improved the quality of public services

The prime minister told a CBI conference that changes such as trust schools, NHS choice and city academies aided "creative energy" and "dynamism".

It was wrong to provide "monolithic services monolithically", he added.

Mr Blair has been criticised by political rivals for missing a debate on Iraq to attend the conference.

'Certain outcomes'

He told delegates it was "frustrating" that improvements in areas like health and education, particularly during the last 18 months, were not always noticed.

Mr Blair criticised the Conservatives for questioning the use of targets.

He said: "I can't imagine any private sector organisation putting the amount of money that we have put into public services and not demanding certain outcomes at the end of it."

Mr Blair added: "I want to get to the situation that when a person goes to a GP, they have got a range of choices available to them.

"They then exercise those choices and the money follows them."

Mr Blair said the private finance initiative, where companies are paid to build and run hospitals and other public buildings and services, made "complete sense".

He went on: "Look at any other walk of life. Take the private sector: services are more customised and built around the individual."

'Barriers'

It was central government's job to put "structures in place which allow local dynamism to come forth", Mr Blair said.

Workforce reform had to continue, he said, with the "barriers" between the public, private and voluntary sectors coming down.

Mr Blair was criticised by his political rivals for missing the debate on Iraq, which was instead be led by Foreign Secretary Margaret Beckett.

But Downing Street said this was the usual practice for prime ministers in foreign affairs debates.

A CBI survey of 373 companies suggests that fewer than one in five firms are confident that reforms in public services will continue when Mr Blair steps down later this year.

It also suggested four out of five companies believed the pace of reform had been too slow.

Hundreds of teachers, civil servants, NHS and council workers demonstrated in support of public services in Westminster on Tuesday.