The European Union cannot allow the continued free flow of goods across the Irish border if Britain is outside the single market and the customs union, Tony Blair has warned.
The former prime minister said the UK could, if it choses, permit the free movement of people between Northern Ireland and the Republic to continue - although it would make a "nonsense" of the argument Britain was leaving to take back control of its borders.
However he said that it would be a different matter as far as Brussels was concerned when it came to goods and services.
"Here's the thing that I don't think is fully understood yet by the British negotiators," he told BBC Radio 4's The World at One.
"When it comes to freedom of movement of people, if the British want to turn a blind eye to that, fine, the Europeans won't mind about that. It makes a nonsense of the idea that you are protecting your borders.
"But when it comes to the free movement of goods then Europe has a direct interest in that. If there is a hard border the European Union will say the same rules must apply as applies to any other hard border with the European Union."
The only alternative, he said, was a "bespoke" deal specifically for Northern Ireland, separate from the rest of the UK, but that was unlikely to prove acceptable to unionists.
Mr Blair, who helped negotiate the Good Friday Agreement, acknowledged that Britain's decision to leave the EU was "problematic" for the peace process.
"One of the elements that was central to the Good Friday Agreement was that because the UK and the Republic of Ireland were both in the Europe Union it was easy to have arrangements which gave expression to the nationalist feelings in the North," he said.
"Free movement of people, free movement of goods, an open border was one part of that expression that the island of Ireland was together, even though strictly and constitutionally one part was in the UK, one part was in the Republic of Ireland.
"If you end up with a hard border, obviously that causes tensions. It doesn't mean that you should abandon the Good Friday Agreement, but it poses real challenges to it."