The Conservative Party leader, Mr Iain Duncan Smith, told Ulster Unionists he was exasperated by the British prime minister's concessions to Sinn Féin.
Addressing the annual conference, he called on Mr Blair to take a tougher stance on Provisional IRA disarmament.
Mr Blair should also consider throwing Sinn Féin out of its offices at Westminster, he said. He pointed to a list of "concessions" including the release of prisoners and the facilities at Westminster provided for Sinn Féin MPs who don't take their seats.
"In the light of Sinn Féin's behaviour at Stormont, this special status must be reviewed. Along with the breaches of the ceasefire, this has done more than anything to give the impression that the process is a one-way street.
"It is time to restore the balance to the process. It is time rewards follow performance and that breaches are properly sanctioned," Mr Duncan Smith said.
Anti-agreement UUP MP, Mr Jeffrey Donaldson, said it was vital the British government did not make any more concessions to Sinn Féin on policing.
The new 50/50 religious recruitment policy for the police was "discriminatory and must be abolished". Morale in the force was very low, he added.
Speaking during a debate on devolution, former UUP MP, Mr Willie Thompson, said the legislation setting up the Assembly was anti-democratic and must be changed. Establishing a government which included all the four major parties meant there was no official opposition at Stormont.
The make-up of a government should be determined not by legislation but by the parties after an election, he went on.
The UUP chairman, Mr James Cooper, told delegates the British, Irish and US governments must ensure movement towards Provisional IRA disbandment.
While his party had been right to enter government with Sinn Féin, adhering to its principles ensured that situation could not continue, he added. "Our message to Martin McGuinness and the world is that it is not this party that is afraid of peace - what is stopping peace are the thugs, the mafia, the terrorists and the murderers, that he and Gerry Adams refuse to abandon."
The anti-agreement MP, Mr David Burnside, spoke against a motion aimed at making it more difficult for the UUP to hold meetings of its governing body, the Ulster Unionist Council. He said the "contemptible little motion" was aimed at stifling internal debate and democracy.
The co-ordinator of the UUP's Washington bureau, Ms Anne Smith, said the party had greatly improved its position in the US in recent years. Referring to Sinn Féin's high profile there, she said it had been difficult to "enter a market where someone else has held a monopoly for years".
Stereotypes and misunderstandings about unionists were being challenged and most politicians and journalists were ready to listen, she added.