UPDATE 1-EU leaders willing to compromise on freedom of movement, says Tony Blair

Blair@ (Adds reaction, Blair's views on Labour)

LONDON, July 15 (Reuters) - European Union leaders are willing to change the bloc's rules for the freedom of movement of workers, opening an opportunity for Britain to avoid a damaging "hard Brexit", former prime minister Tony Blair said on Saturday.

The election of French President Emmanuel Macron had put reform of the EU on the table, meaning Britain and the EU could meet "halfway" to strike a deal that would keep Britain inside the world's largest trading area, Blair said.

"The European leaders, certainly from my discussions, are willing to consider changes to accommodate Britain, including around freedom of movement," the former Labour prime minister said in an article published by his Institute for Global Change.

"The opposition to free movement of people, once you break it down, is much more nuanced. The French and Germans share some of the British worries, notably around immigration, and would compromise on freedom of movement."

Blair's comments are at odds with the EU's negotiating stance, which stresses there can be no "cherry picking" from the benefits of membership of the EU's single market without accepting freedom of movement for EU workers.

In a separate interview, Blair said he thought it was possible that Britain could stay in the EU because public opinion was moving against Brexit.

"I think it's absolutely necessary that it doesn't happen because I think every day is bringing us fresh evidence that it's damage economically," he told Sky News' Sophie Ridge on Sunday programme.

The pro-Brexit Leave Means Leave campaign said Blair's comments showed how out of touch he is with voters.

"Sadly Westminster Remainers are still in denial, whilst more and more business people see the advantages and opportunities of leaving the EU," said Richard Tice, Leave Means Leave's co-chair.

In his article, Blair lamented that both Prime Minister Theresa May's Conservative Party and the opposition Labour Party had set their minds on leaving the single market, without exploring the alternatives.

"Given what is at stake, and what, daily, we are discovering about the costs of Brexit, how can it be right deliberately to take off the table the option of compromise between Britain and Europe so that Britain stays within a reformed Europe?" he said.

Blair praised the current leader of the Labour Party, left-winger Jeremy Corbyn, for mobilising young voters in last month's general election in which May lost her majority in parliament.

But he added that this would not alter the "risks" of a possible government led by Corbyn.

"If a right wing populist punch in the form of Brexit was followed by a left wing populist punch in the form of unreconstructed hard left economics, Britain would hit the canvas, flat on our back and be out for a long count," Blair said.

Corbyn rejected this.

"I think our economy will do very well under a Labour-led government because it will be an investment-led economy that works for all," he told BBC News.

Blair was prime minister for 10 years until 2007. He wanted to take Britain into the euro zone and believed Britain should lead the way in the EU rather than withdraw from it. (Editing by Dale Hudson and Hugh Lawson)