Osborne fails to rule out Ukip deal
George Osborne has refused to rule out a deal with Ukip after the general election in the event of a hung parliament.
Nigel Farage has said he would prop up a Tory government if the party agreed to stage a referendum on Britain's membership of the European Union in 2015.
The Chancellor claimed Mr Farage was trying to "muddy the waters" and claimed the Ukip leader was "not a credible participant" in the general election.
Mr Osborne told BBC One's Andrew Marr Show: "It's just total nonsense. Voting for Nigel Farage makes Ed Miliband the likely prime minister and it means that instead of getting a referendum on Europe you get no referendum at all."
He added: "Nigel Farage is not going to win seats in the House of Commons. Even on his own estimation, even on his own boasts he says he is going to win a small handful."
But pressed to rule out a deal, he replied: "Even engaging with Nigel Farage on this is giving him credibility where he has no credibility."
The Ukip leader issued David Cameron with a four-point ultimatum on Britain's position in Europe in an extract of his memoirs published by the Sunday Telegraph.
And he said he would bar EU citizens who do not hold a British passport from voting, even though that would include his German wife, Kirsten, and could lead to a legal challenge.
But the Ukip parliamentary candidate for South Thanet reiterated that his party would not enter a formal coalition with the Tories and he was not interested in a "ministerial car".
Mr Farage said: "I would look to do a deal where we would back key votes for them - such as the budget - but in return for very specific criteria on an EU referendum.
"The terms of my deal with the Tories would be very precise and simple. I want a full and fair referendum to be held in 2015 to allow Britons to vote on being in or out of the European Union. There would be no wiggle room for 'renegotiation' somewhere down the line'.
"The EU is facing an existential crisis and, given that it only takes a few weeks to launch and organise a referendum, it should be held in 2015.
"It is my strong belief that the four million EU citizens living in the UK without British passports should not be allowed to do so (vote). And yes, that includes my German wife. They are eligible to vote in European elections, but they should not have the right to decide on Britain's future in the EU. It may be that that would require us to do battle with the European Court of Justice - but so be it."
Mr Farage added the wording of the question "matters hugely", he wanted spending limits on campaigning to avoid any "shenanigans" and an ombudsman should be established to monitor media coverage.
While he admitted "a vast number of them (Tories) hate us and I dislike them", he said he could work with Conservative Chief Whip Michael Gove.
The Prime Minister has promised the British people a vote on whether to sever ties with Brussels by the end of 2017 if he remains in No 10 after the general election.
Tory former Cabinet minister Ken Clarke said he would not do a deal with Ukip and would be "shocked" if any party did.
He told Murnaghan on Sky News: "I would be fiercely opposed to anybody doing any deal with a hard-line right wing nationalist party that wants to blame foreigners and Brussels for all our problems.
"It would be an extraordinary thing to do to enter into an agreement with a party that is just angry protest.
"I understand angry protest but it is not a party that any of the serious governing parties should enter into deals with.
"If we have a referendum, I would quite like it to be done early. We have achieved most of the things that David Cameron set out in his Bloomberg speech when he announced his desire to have a referendum and I think having this neurotic debate with occasional interventions from Mr Farage for the first two years of the next parliament is a nonsense that no government, whoever is elected, would really seriously want to put up with."
Shadow foreign secretary Douglas Alexander said: "David Cameron has already changed his position three times on Europe in the face of internal pressure from his backbenchers and external pressure from Ukip.
"Now we know that Nigel Farage is demanding further new concessions in return for helping the Conservatives cling on to power.
"Nigel Farage wants a Tory government. Ukip is ready to prop up a Tory government and support their plan to take spending levels back to the 1930s when we didn't have a health service.
"The question is whether Cameron will cave in and take even more risks with our membership of Europe and Britain's economy. Sadly his past conduct suggests David Cameron will continue to try and appease the unappeasable - whatever the cost to British business."
Labour sources said Mr Farage's proposition showed Ukip was a "right wing version of the Tory party".
"He is setting a ransom demand to Cameron of support after the election in return for an even more extreme, more reckless, more dangerous approach to Europe," they added.