UK retailer Tesco has remained silent on reports that it has engaged in talks with former British Prime Minister Tony Blair about its ambitions to open stores in the Middle East.

Blair and Tesco have allegedly been discussing a GBP1m (US$1.6m) deal for him to become a "figurehead" for the supermarket group's bid to break into Middle Eastern markets.

As a peace envoy to the region, Tesco hoped Blair's diplomatic clout would aid the group's expansion, the Mail on Sunday reported.

However, after five months of discussions, talks between Tesco and Blair have allegedly broken down, not over money, but over "another issue".

Tesco has exported its brand to more than 2,000 stores worldwide. Yet it has so far notably failed to follow the likes of Marks & Spencer into the Middle East.

Tesco chief executive Sir Terry Leahy was a government adviser, and was knighted under Blair's premiership.

A spokesperson for Tesco however, said: "We wouldn't comment on which advisers we may or may not talk to."

The spokesperson also remained silent on "speculation" about "potential markets for Tesco".

Blair gives economic and political advice through his company Tony Blair Associates. However, the company was unable to be reached for comment at time of press.