The claims, denied by the former head of MI5, raise questions over how much knowledge British Security Services had that torture was being used in the fight against al Qaida ahead of Sir Peter Gibson's inquiry into the issue.
His comments, made in the BBC's The Secret War on Terror, come as an FBI agent told the same programme that officers were looking to fictional CTU agent Jack Bauer in the TV series 24 "to get ideas on interrogation methods" that could be used at the controversial Guantanamo Bay detention centre.
Mr Musharraf's claim that he saw the UK's actions as "a tacit approval of whatever we were doing" was rejected by former MI5 director Baroness Manningham-Buller, who said he was "wrong" and denied that "a blind eye had been turned".
Sir David Omand, Whitehall's security and intelligence co-ordinator between 2002 and 2005, added: "I am very clear we are not and have not been complicit in torture and I'm in no doubt that all the countries concerned including Pakistan and the United States were very well aware of what British policy was, which was we don't do this and we don't ask other people to do it."
But Mr Musharraf told the programme he had no recollection of being told by the British Government that the ISI intelligence service should not use torture on British subjects.
"Never. Never once, I don't remember at all," he said. "Maybe they wanted us to continue to do whatever we were doing; it was a tacit approval of whatever we were doing."
He went on: "We are dealing with vicious people and you have to get information... We need to allow leeway to the intelligence operatives, the people who interrogate."
Asked if the end justified the means, he added: "To an extent, yes."
Jim Clemente, of the FBI's Behavioural Analysis Unit, told the BBC he was shocked by what one officer told him when he went to observe interrogations at Guantanamo Bay. He said: "She actually had watched the television show 24 to get ideas on interrogation methods that they would then utilise at Guantanamo. It was outrageous, unbelievable that someone would do something that stupid."