An attempt to derail controversial plans to allow some terror suspects to be put under house arrest has been foiled by the government.
Mr Blair is being accused of ramming through anti-terror laws
In their first vote on the plans, MPs approved them by 309 votes to 233, despite opposition from the Tories, Lib Dems and 32 Labour rebels.
The issue provoked heated debate, with Tony Blair accused of steamrolling through "authoritarian" plans.
Mr Blair said "terrorism without limit" needed to be tackled with new powers.
A joint Tory-Lib Dem motion against the Prevention of Terrorism Bill was defeated by 316-216, a majority of 100.
But ministers faced prolonged criticism from opponents who say only judges, not politicians, should be able to order curbs on the liberty of British citizens.
The government's usual majority of 161 was substantially reduced, with several Labour MPs abstaining.
Veteran Labour MP Brian Sedgemore said the government should be "damned" for moving to a style of justice used by South Africa under apartheid.
And ex-Cabinet minister Frank Dobson said the house arrest plans undermined the "timeless rights of British citizens and our standing in the world".
The bill now faces line-by-line scrutiny from MPs on Monday before passing to the House of Lords, where the government is expected to receive a rougher ride.
'No house arrest yet'
The bill proposes "control orders", which as well as house arrest could impose curfews, tagging or bans on telephone and internet use.
They would replace current powers to detain foreign terror suspects without trial, which the law lords have ruled against.
There are currently 11 detainees, mostly at Belmarsh prison in east London.
They will be freed when the existing powers expire on 14 March and Mr Clarke says he does not currently intend to use the house arrest powers.
The home secretary told MPs the UK now faced a different order of terrorist threat, global in scale and aimed at mass murder.
Control orders were needed where prosecution was impossible, he argued.
Mr Clarke promised any control order could be reviewed by a judge, who would have to reach a decision within seven days in cases of house arrest.
At prime minister's questions, Tory leader Michael Howard said the powers were being "rammed through Parliament" unnecessarily.
He said: "Playing politics is using national security for political point scoring when that should be the furthest thing from the mind of a prime minister faced with these threats."
Mr Blair countered that he was acting on the "unanimous" advice of the security services and police chiefs.
The UK's security had to come first, he argued.
"That's not simply what a responsible prime minister should do, but what a responsible leader of the opposition should do," he said.
The Lib Dems say they are not opposed to control orders in principle, but want decisions to be taken by a judge on a higher standard of proof.
Lib Dem leader Charles Kennedy said the plans, like identity cards, showed that "whenever presented with a problem, the instinctive response of this government is authoritarian".