The UK games sector was in favour of Microsoft’s bid for US firm Activision being approved, according to the man who led the company behind Tomb Raider.

Sir Ian Livingstone, also co-founder of Games Workshop, said it would be “odd” if the UK was the only place to object.

The blocking of the deal by the UK regulator provoked a furious response from Microsoft, with its president saying the move was “bad for Britain”.

The UK’s move means the multi-billion dollar deal cannot go ahead globally.

The planned $68.7bn (£55bn) deal would have been the gaming industry’s biggest ever takeover, and Microsoft would have taken ownership of popular games titles such as Call of Duty, Candy Crush and World of Warcraft.

US and EU regulators have yet to decide on whether to approve the deal, but on Wednesday the UK’s Competition and Markets Authority (CMA) blocked it, saying it was concerned the deal would offer reduced innovation and less choice for gamers in the fast-growing cloud gaming business.

Both Microsoft and Activision have said they will appeal against the CMA’s decision.

On Thursday, Microsoft president Brad Smith launched a fierce attack on the judgement, telling the BBC that it marked Microsoft’s “darkest day” in its four decades of working in the UK.

“People are shocked, people are disappointed, and people’s confidence in technology in the UK has been severely shaken,” he said, adding that the European Union was a better place to start a business.

A spokesman for Prime Minister Rishi Sunak said Mr Smith’s claims were “not borne out by the facts”, adding that the UK games sector had doubled in size over the past 10 years.

Sir Ian, who is now co-founding partner of gaming investment group Hiro Capita, told the BBC’s Today programme: “I think the sentiment of the games industry itself in the UK is for it to go ahead.

“It would be odd if the UK was the only region to object to this acquisition going forward,” he added.

“I would hope that they can sit down and perhaps negotiate a settlement which might be in everybody’s interest over time.”

Sir Ian said the UK’s games industry was “a great British success story”, having developed some of the biggest franchises in the world including Tomb Raider and Grand Theft Auto.

“It’s always been overdelivering in content but always underserved by capital and recognition,” he added.

“This is a highly competitive market and any negative sentiment is not good for the industry or indeed the UK economy.”

The CMA is the first regulator to announce its decision, but last year the US Federal Trade Commission began a legal challenge to block the takeover.

In March, EU regulators delayed their decision after Microsoft proposed concessions to get the deal over the line.

Sir Ian said “it’s somewhat come as a surprise that they [the CMA] said no at this time”.

However, Gareth Sutcliffe, senior games analyst at Enders Analysis, said the deal “has been in trouble for a while”.

He added that Microsoft “simply didn’t do the necessary regulator outreach to get this deal over the line”.