The document, part of a broad policy review process under way as Blair prepares to step down in 2007 after a decade in charge, warns of the widening economic gap, rising social tensions and low rates of crime detection.
"Unless action is taken, economic and social pressures are expected to put recent falls in crime under threat," the newspaper cited the report as saying.
"There is an increasing wealth gap ... the very poorest have got poorer since 1997," the report adds.
A spokesman for Blair's Downing Street office said the document was not government policy, and people should wait for the end of the policy review process.
"It sets out lots of ideas for discussion, including looking at measures taken in other countries," he told Reuters. Blair came to office in 1997 on the slogan of being "tough on crime, tough on the causes of crime".
The document warns of a 25 percent rise in prison inmate numbers to 100,000 from 80,000 - a serious problem when the Home Office's budget to build new jails has been frozen.
It notes that locking someone up was an expensive way of tackling the problem of crime. It proposes considering chemical castration for sex offenders, alcohol rationing and a ban on alcohol advertising among a host of other measures.