We can't know for certain, but here's what he said in an interview in 1987. (Bear the date in mind when he's talking abut special effects, as this was before the advent of CGI.)
An excerpt from an interview with Terry Nation by Joe Nazzaro in The Freedom City Gazette #3 (1987).
Terry: I know how to get them out. Paul is alive, and sitting on an island on a planet; a little like Napoleon on Elba. It's been seven years, the magical 'seven', you see, and he has been as good as gold. He makes televisual broadcasts right across the universe saying how wrong Blake was, and that the Federation... He's gone their way entirely, it seems, but once in a while he's been hearing reports that there's a guy somewhere who's a tiny thorn in the side of the Federation. He's out on the rim galaxies, and our guy is going to turn. He's going to stop being passive, and we're going to be a group again.
Joe: So obviously you have plans for Avon.
Terry: Oh, I wouldn't do it without Avon.
Joe: I can understand your not wanting to give away too much in terms of what you'd like to do in the future, but can you give us an idea about who you'd like to bring back?
Terry: I would love to bring Michael Keating back, which I think I can. Avon, certainly. Beyond that, I'm not sure.
Joe: What it sounds like you're doing is starting the series all over again, but instead of Blake as the central character you're using Avon.
Terry: Avon has to have someone to work against. It is no good making Avon the leader, because he is not that figure, though he would like to be. I think Paul, would like to be, but he is not that figure. He is better in conflict with somebody, so I would need a Blake substitute, another figure somewhere that is not Blake but provides some of the same things.
Joe: The antithesis to Avon.
Terry: That's right. It's two parts of one character.
Joe: Let's wrap this up by asking: if you had your choice of the ideal situation for bringing back Blake's 7 to British Television, how would you prefer to do it? Would you do it as many fans would prefer it - as a fifth season, or would you rather the BBC put a little money into it and do a big television movie?
Terry: No, frankly, they could actually reduce the budget. No, they couldn't because it was so small anyway. What I'm saying was that it was very clear where Blake was going. That's a lesson I've learned here, and if I do science fiction for a network here, I can't and they can't begin to match George Lucas or all the other people who've done such wonderful special effects. I would go as much more for character and conflict within that character, and for the kind of morality of being outlaws. There is no way that we can do the special effects, so you've got to be a new route, and the route has got to be about people, and a lot of American fans have realised that Blake is about people. We've all said it at cons that the special effects at the BBC is a guy shaking the scenery, and that's it, that's a special effect, so I don't want to do that. We can't do it, so as long as I can have a few shots of the ship in flight that I can cut to, and then get back to the people that's what I want to do.
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