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.