Documents show that Gaddafi turned to Mr Blair after a U.S. court ordered Libya to pay $1.5billion (£1billion) in damages to relatives of seven Americans killed when a bomb exploded on a Paris-bound passenger jet in west Africa.
According to the email, Mr Blair approached President George W Bush after promising the Libyan leader that he would intervene in the case.
Mr Bush subsequently signed the Libyan Claims Resolution Act in August 2008, which invalidated the $1.5billion award made by the court.
UTA Flight 772 from Chad was blown up on Sept 19, 1989, by Libyan intelligence services, killing all 170 passengers.
The attack took place nine months after Pan Am Flight 103 was blown up over the Scottish town of Lockerbie killing 270 people.
The relatives of UTA Flight 772 had won the billion-pound court case in January 2008 after a seven-year legal battle, causing serious difficulties for the Libyan regime in the US.
The ruling meant the proceeds of Libyan business deals, mainly in oil and gas but including other investments, could be seized in the US.
Mr Blair’s involvement in the case is outlined in an email obtained by The Sunday Telegraph.
The document was written by Sir Vincent Fean, the then British ambassador to Libya, and was sent to Mr Blair’s aides on June 8, 2008, two days before Mr Blair met Gaddafi in Libya.
