The tactic has come under fierce criticism after a Brazilian electrician, Jean Charles de Menezes, was shot dead by police marksmen who were hunting the men behind the failed London bombings of 21 July.
Anger that Parliament was not told about the policy was fuelled yesterday by the disclosure that the Prime Minister and the former home secretary were informed of the change in tactics. The decision was taken in January 2002 in the wake of the 9/11 attacks in the United States.
Mr Blair has previously said he could not remember whether he was officially made aware of the policy change. But when Lord Stevens of Kirkwhelpington was asked on BBC Radio 4's Today programme if Mr Blair and Mr Blunkett had been told, he replied: "In terms of what the operational decisions were, yes indeed." He added: "Politicians, of course they know and these things are discussed because we have to find the right ways of dealing with them."
Lord Stevens, who oversaw the move to the new tactics, admitted the Metropolitan Police Authority was not informed of the policy change and there was no wider discussion or debate.
"Maybe we should have discussed it but I think some things we keep secret about because if people know exactly what we are doing they can take action to stop it," he said.
Mark Oaten, the Liberal Democrat home affairs spokesman, said: "If politicians were consulted and asked for their views by John Stevens, then that should have come to Parliament."
Downing Street said yesterday it had no record of the Prime Minister being told about the policy change. A spokesman said: "Our position remains the same. This is an operational matter and this is a matter for the police to decide.
"Ministers can be informed about such operational matters, but are not consulted as such. We have no record of his being informed and he [Tony Blair] cannot recall being informed."
The de Menezes family have demanded that the shoot-to-kill policy is suspended, protesting that it has never been debated in Parliament.
But it has been defended by both Charles Clarke, the Home Secretary, and Sir Ian Blair, the current Metropolitan Police Commissioner.