We had many broken links in our websites because of changing the URL names We have blocked these URLs by Webmaster tools as well as by robots.txt Pls suggest if it is correct or will it hurt the site in any way???
You can do a 301 redirect or can create custom 404 page. I think that would be better idea than blocking it by robots.txt
No I dont think so that it affects your site but as rudradhar says you can use 301 redirection. This is much better than blocking URL through robot.txt.
You don't need to block these broken URLs. Do a 301 redirect pointing from the broken link to the new one. This way any link juice from the broken URL will be passed on to the correct/new page. Hope that helps. Have a good day!