The first minister has warned that the cash-for-peerages inquiry could harm Labour's assembly election chances.
Mr Morgan said the police inquiry 'wasn't helping'
Rhodri Morgan said the inquiry could divert attention from the 3 May poll and he did not want it to become a referendum on Westminster events.
But he said he was "quite indifferent about the timing" of the prime minister's departure from office.
Mr Morgan spoke after it emerged that Mr Blair had been interviewed by police as a witness for a second time.
The interview took place a week ago in Downing Street, but was kept secret by the prime minister until Thursday at the police's request.
Mr Morgan is one of an increasing number of senior Labour Party figures to express concern over the damage the inquiry is doing to the party and politics in general.
Party chairman Hazel Blears said it was causing a "corrosive cynicism" and Constitutional Affairs Minister Harriet Harman said it was "eroding trust".
Former Labour leader Neil Kinnock warned it would take "years" for the political system to recover from the damage the inquiry had caused.
Mr Morgan said of the cash for peerages inquiry: "It isn't helping, is it?"
The investigation was ordered after it was discovered Labour had received loans before the 2005 general election from people who were subsequently nominated for peerages.
The First Minister also commented on the battle for the Labour deputy leadership.
He refused to offer Welsh Secretary Peter Hain his support in the race.
Mr Morgan agreed that Mr Hain was "running furiously" for the post but said it would be "idiotic" to support a candidate before it was know whether they had enough support from MPs to enter the race.