'I believe, though I know many of you don't, that elected mayors, at least for our big cities, have a role. Let the debate begin,' he told delegates during his end-of- conference speech in Birminham last Sunday.
He described mayors as one way of giving power back to the people, as part of Labour's 'stakeholder economy'.
He told councillors he would not make any irresponsible promises on resources for local government: 'But we can promise greater flexibility and greater stability in the way the law applies to you.
Labour's vision of a stakeholder economy meant ending the divisions in education, Mr Blair said.
'The Tories want this debate to be about 150 grammar schools. I want it to be about seven million children and 25,000 state schools,' he said.
He highlighted Labour's plan for a phased release of council capital receipts to build homes, portraying it as a way to create jobs to tackle long-term unemployment.
-- Birmingham City Council leader Theresa Stewart used her welcoming address to demonstrate her scepticism about elected mayors.
'Elected mayors may be useful as the embodiment of a city, but they will not necessarily allow us to build the complex coalitions needed to sustain city life,' she said to much applause.