Home Secretary John Reid told Parliament that the three men who dropped from sight Monday were suspected of planning to travel overseas to carry out terrorist attacks.
The development angered Blair, whose final days in office could turn into a divisive fight over the handling of suspected terrorists.
Britain's "control order" system — a partial house arrest created after judges ruled suspects could not be detained indefinitely without trial — has been exposed as "very much a second-best option," Blair said.
The orders "are not a strong method of keeping people under control," he told reporters. "If we are going to tackle this terror threat with the seriousness it needs, we need the tough measures necessary to protect this country fully."
Officials did not specify when proposed new laws would be presented, but Blair's spokesman said the government was reviewing its options.
Reid said Britain could consider opting out of the European Convention on Human Rights, a move likely to further antagonize civil rights campaigners. In two cases last year, senior British judges cited the convention in ruling against the government.
Civil liberties campaigners said any attempt to create tougher anti-terror laws risked a new political battle for Blair, who will resign as British leader June 27.
"Punishment without trial is a failed policy on both sides of the Atlantic," said Shami Chakrabarti, director of the human rights group Liberty.
Blair suffered his first major domestic defeat in 2005 when lawmakers, including members of his Labour Party, rejected his plan to allow police to hold terrorism suspects for up to 90 days without charging them with an offense.
The escaped men, all British citizens, were not thought to pose a direct threat to the British public because they apparently wanted to engage in violence elsewhere, the home secretary said.
But Ian Blair, head of London's Metropolitan police force and Britain's most senior police officer, said there was no guarantee the men did "not pose a threat to the U.K."
Two of the fugitives, Lamine Adam, 26, and Ibrahim Adam, 20, are brothers of Anthony Garcia, who was convicted and jailed for life last month over a plot to bomb a nightclub, power plants and other targets in Britain, police said. The third man was Cerie Bullivant, 24.
They slipped away while being under control orders, a system that has been widely criticized by Cabinet ministers as too lax because it does not allow for 24-hour surveillance by police.
Under control orders, suspects can be electronically tagged, kept under curfew, denied the use of telephones or the Internet and barred from meeting with others.
Blair's government created the system after Britain's highest court ruled in 2004 that holding suspects in prison without trial was unlawful.
Those monitored under the control-order system are deemed a risk to national security, but face no criminal charges. Evidence against them is often classified on security grounds, and civil rights campaigners say too little effort is made to prosecute the suspects — which would allow them to challenge the allegations.