A man identifed by the Guardian as David Lawley-Wakelin, 49, burst into the London courtroom where Blair was testifying to shout:
"Excuse me. This man should be arrested for war crimes. JP Morgan paid him off for the Iraq war, three months after we invaded Iraq. He held up the Iraq bank for £20 million. He was then paid $6 million every year, and still is, from JP Morgan, six months after he left office. The man is a war criminal."
Security guards then escorted the protester outside. He has been arrested on charges of breaching the peace, the BBC reported.
An investigation has also been ordered into how Lawley-Wakelin was able to access the courtroom.
Blair specified that his accusations were "completely and totally untrue."
The former prime minister is appearing before the Leveson Inquiry into media ethics to answer questions on the relationship between politicians and the press, and in particular, his own dealings with News Corporation's Rupert Murdoch.
According to the Telegraph, Lawley-Wakelin is a freelance director who has made a documentary called The Alternative Iraq Enquiry. He once accused Blair of being "prepared to kill in the name of oil" during a TV debate show.
Rupert Murdoch was famously hit by a cream pie during an appearance at the British parliament's inquiry into press standards last year.
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