"I am completely satisfied there has been no breach of any of the rules in relation to Labour Party nominations," he told reporters.
But Mr Blair did reveal that he is considering changes to how nominations are made to the House of Lords, Britain's unelected upper chamber of parliament, as he was forced to fend off countless questions at his monthly news conference.
Mr Blair said he wanted to "take the politics out" of the honours system by renouncing the prime minister's right to nominate individuals, acknowledging that the whole area of party funding was a "sensitive and controversial" issue.
Any change, however, would need to be applied for all parties, he added, saying he favoured loans to be treated in the same way as donations to parties, and declared to the Electoral Commission.
Mr Blair's latest test comes after allegations that three businessmen, who lent a reported 3.5 million pounds to Labour last year, were later nominated for a seat in the Lords.
The row escalated after Labour Party treasurer Jack Dromey announced an inquiry into the matter, saying he had not been informed about the loans, which came in the run-up to last May's general election.
Labour said it had "fully complied" with rules on fund-raising while Mr Blair told reporters he had no doubt the three donors were motivated out of a sense of public service.
Disclosure not mandatory
Unlike gifts from supporters, loans do not have to be disclosed in the commission's regularly-updated register of donations to political parties.
This means that questions about the source of a particular sum of cash can normally be put off until the publication of the party's accounts.
Electoral Commission Chairman Sam Younger said there was an overwhelming case for loans to be treated in the same way as donations.
Meanwhile Britain's influentual Economist newsmagazine has advised Prime Minister Tony Blair to resign, contending that it is unlikely that he can push through much more of his ambitious reform agenda.
"Mr Blair still benefits from a high international reputation, despite Iraq and despite squabbles within the European Union," it said in an editorial.
"He has set domestic policy, especially on health and education, on a better course," it said.
"But only if he feels absolutely sure that he is capable of driving his health and other reforms through during the next two years should he stay longer."
"To do that, after nine wearying years in office, would be quite a task. Better, surely, for him to quit while he is still ahead."