"This is the perfect environment if you are Nigel Farage," Nick Clegg told the Guardian at the end of last week. "The people who are trying to exploit the politics of grievance and blame, they believe they have got the wind in their sails."

By coincidence, I was interviewing Farage, the leader of the United Kingdom Independence party (Ukip) on Friday and at that point he didn't seem to have the wind in his sails.

It was a few hours after the announcement of the result in the Feltham and Heston byelection and, despite speculation that Ukip could overtake the Lib Dems, Clegg's party hung on to third place. But, as Farage talked about the broader political picture, he was upbeat about Ukip's chances of tugging Britain out of the EU. Here are the key points from our conversation.

• Farage said Ukip could form an electoral pact with the Conservatives at the next election if David Cameron were to promise a referendum on membership of the European Union. There was "every chance of forcing David Cameron into giving us a referendum", he said. Whether or not to propose an electoral pact with the Conservatives in 2015 would be a "huge decision" for the party, he said. But he had offered the Tories a pact before the 2010 election, he said.

• He renewed his call for 20% of teachers to be sacked. "There's no doubt there are too many people in the teaching profession who have academic achievements and qualifications [that mean] frankly they shouldn't be in that position," he said.

• He signalled that he was going to ditch Ukip's policy of banning the burqa. At the last election Ukip was in favour of banning the burqa in public buildings and some private buildings. But Farage, who was not party leader at the 2010 election, said this was a policy he had inherited. It was being reviewed, he said. He was "dubious" about using legislation in this area. "I'm not really in favour of banning the burqa," he said.

• He said that he made a mistake when he accused Herman Van Rompuy, the president of the EU, of having "all the charisma of a damp rag and the appearance of a low-grade bank clerk" in a speech in the European parliament. "Hands up, I got the tone of that wrong," Farage said.

• He suggested that Ukip still had a problem with "nutters" among its members. In the past he has used this term and talked about Ukip having a disproportionate number among its members when it launched as a new party. Asked if this was still a problem, he said: "Less than it was."

• He claimed Ukip was a "very globalist party". He explained: "We are the party saying we've got to stop being so small-minded and thinking that the beginning and end of the economic world is Europe. It jolly well isn't."

Most commentators don't take Ukip particularly seriously because, although they do well in European elections, where they scoop up the anti-European protest vote, they are irrelevant at Westminster because they have never come close to winning a seat in the House of Commons. But earlier this year the Labour magazine Progress speculated about Farage winning enough seats to hold the balance of power after the 2015 election.

Absurd fantasy, or a plausible scenario? In a 30-minute interview at Europe House, the old Conservative party headquarters which is now (ironically) the European parliament and commission's London HQ, we covered this and much else. You can decide for yourself.

Being offensive in the European parliament

Q: On the blog I posted inviting people to suggest questions, there were lots of comments from people who have seen your speeches in the European parliament on YouTube. And they want to know why you're so offensive. For example, this was from gilly606: "I accept that when you speak in the European parliament you are trying to make a point you believe in. But why do you have to be so rude? Why can't you act more like a professional, intelligent, open-minded representative of our country?"

A: Gilly, have you seen what they say about me? No.

Q: Two wrongs don't make a right, as I have to tell my children.

A: Listen, the one speech I've made that was said to be rude was the Rumpy Pumpy speech. [The one in which he told Herman Van Rompuy, the president of the EU, that he had "all the charisma of a damp rag and the appearance of a low-grade bank clerk" – the Guardian story about it is here, and the YouTube footage here.]

A lot of this is about parliamentary culture, isn't it?

Q: Are you saying it's part of the European parliament's culture?

A: No, it's not part of their culture. That's the point. [The European parliament] has been designed with this semicircle. The basic assumption when I went there in 1999 was that we would all agree exactly on the direction we were going; the only argument was about how quickly we would get there.

Q: But if you stood up in Westminster and said that David Cameron had all the charisma of a damp rag …

A: Everyone would laugh. What did Vince Cable say about Gordon Brown?

Q: That he was Mr Bean.

A: There you are. What's the difference? In parliaments all over the world you get real confrontation. But the European parliament is not designed for that, because we're not politicians; we're technocrats.

Q: But Vince Cable was using a joke to a make a point. Your comment about Van Rompuy just seemed offensive.

A: Well, if you look at the words I uttered, it's not very offensive. If you look at the tone in which it's delivered, I can understand why people think that. And I've said since then that when you are an unscripted speaker, which I am, sometimes you get the pitch wrong. So, hands up, I got the tone of that wrong. And the reason? This is my defence. When you hear debate in Westminster, there are 200 microphones hanging from the ceiling. So you get a feeling, when you listen or you watch, not just for what the speaker is saying, but for how the house is reacting. In Brussels all you get is the speaker's microphone. So you have absolutely no idea the extent to which on that day I was being jeered. It was very noisy. There were 300 of them absolutely screaming at me. And I responded to that by lifting the pitch to a level that looked a little bit aggressive. I accept that. Do I think apart from that my speeches have been rude? No I don't.

Q: Another Ukip intervention that offended people even more was Godfrey Bloom calling a German MEP a fascist. Do you think that was acceptable?

A: No. But it was an off-mic comment that somebody heard and there was all the feigned outrage. He would not have stood up and said it. He said it in a half-jokey manner. It wasn't the right thing to have done.

Q: Did you ever apologise to Van Rompuy?

A: I apologised to bank clerks the world over.

Relations with other MEPs

Q: If you ever got elected to the House of Commons, would you try to play the same role in the House of Commons, as a licensed hooligan?

A: I wouldn't be on my own. I wouldn't be surrounded by hundreds of people that hate me, by hundreds of people that don't think I should exist. They actually don't think I should be allowed to be an MEP. This is how undemocratic these people are.

Q: What evidence have you got for that?

A: Very early on, in 2005 or 2006, Hans-Gert Pöttering became president of the European parliament. German MEP, quite senior, been there since 1979. And in my first proper introduction to him he said: "People like you shouldn't be here." I said: "You mean, you don't agree with my point of view." He said: "No, people like you shouldn't be here."

Q: Because you did not support the institution?

A: Yes. They do not think of this as being a democratic chamber. They think of this as being an adjunct to, and to work hand-in-glove with, the European commission.

"Nutters" in Ukip

Q: In your autobiography, Flying Free, you said that in the early days Ukip had a disproportionate number of "nutters" because new parties attract fanatics. [As Farage put it: "Enthusiasm is a prerequisite (in a new party) and enthusiasm is nowhere greater than in the fanatical or the personally ambitious. Nutters and the self-seeking therefore hitch rides."] Do you still think that is a problem for the party?

A: Less than it was. I think the quality of people coming to Ukip has increased markedly. Look at the bloke who stood for us in the [Feltham and Heston] byelection: a successful businessman, somebody with a bit of background, a bit of knowledge of the world. The quality of people has improved markedly. And our selection procedures have improved markedly too.

Political correctness

Q: On the Ukip website there's a page headlined: "What we stand for." It says: "Political correctness is stifling free speech." One of my readers [JonathanCR] wants to hear an example of something that you're not allowed to say because of political correctness but that you would want to say.

A: I think we've been through a very long period of time when to even discuss immigration was considered to be racist. When you look back on it, that Enoch Powell speech was a disaster because it actually stopped national debate because of the language that he used and everything else.

Q: But is there anything now that you want to say that you can't because of the forces of political correctness?

A: I think there are some issues. For example, the current debate on gender balancing. If you say anything against gender balancing, whether it's FTSE boards or whatever, you are perceived to be anti-women. I can make a very intelligent argument that said if you and I were both working in the private sector and we both had commercial customers, and I was a woman and I had three children in the space of the next five years, that I would not be able to do my job as well as you because my client base would not be there. After 20 years in business, that to me says that's one of the reasons why a lot of women do find it more difficult to get to the top of companies. Having debates like that is very, very difficult because there's a perception that you are doing down women. There are lots of examples of that. But I do think the big one has been the whole immigration debate. And I do think we are getting to a much more mature level.

Schools

Q: Another claim on your website is that: "Children are taught to be ashamed of our past." When have your children ever been taught to be ashamed of the past?

A: Oh, yeah, the empire was absolutely awful, and we're beastly people, and the archbishop of Canterbury marches through the streets of Canterbury wearing sackcloth and ashes apologising for slavery, not saying here's the bicentenary of us being the first country to recognise that not only was what we had done morally wrong, but that we were now going to try to free the rest of the world from slavery. That's an example.

Q: But are children really taught that the British empire was a bad thing? My children have never been taught that.

A: I think so, yes.

Q: Have your children been taught that?

A: My children have been taught that we used to have wars and poverty, and terrible things used to happen, but now we've got the European Union and all will be well.

Q: I don't think my children have been taught that either.

A: Aged eight, in primary school. They all get that. [Later he said he was talking about his child's experience in a private school, not a state school.]

Q: You've got strong views on teachers. In your book you say: "A good 20% of teachers should be sacked as useless functionaries." Why do you think that?

A: The real expert on this is Lord Pearson [the former Ukip leader]. Before he got involved with the European question and other things, education was his big thing. There's no doubt there are too many people in the teaching profession who have academic achievements and qualifications [that mean] frankly they shouldn't be in that position. We have suffered a bad lowering of standards.

Q: But how do you get that 20% figure?

A: These are all figures from Malcolm [Pearson]. I'll give you an example. I met a former headmaster of quite a well-known public school at a social event who is now running an academy. He said he was jealous of the guys starting new academies because they could start with a blank sheet of paper. He said he had one in five of his teachers who were having a detrimental effect on the pupils they taught and he could not sack them. That's absolutely from the horse's mouth.

Banning the burqa

Q: You have talked about Ukip being a libertarian party. In your book, writing about when you joined the party, you say: "I was a libertarian to my fingertips and would have welcomed the chance to fight for the nation's cross-dressers, swingers, naturists, prostitutes, adult nappy-wearers, consensual cannibals and the like."

A: That's Ukip, isn't it. We have all sorts of people in our party. We've not no prejudice against any of them. And we want the state to butt out.

Q: Well, why are you in favour of banning the burqa then? [In its manifesto at the last election (pdf), Ukip said it would "tackle extremist Islam by banning the burqa or veiled niqab in public buildings and certain private buildings".]

A: Well, I'm not really in favour of banning the burqa. I'm not.

Q: You're on record as saying …

A: On record as saying that if you can't wear a motorcycle helmet in NatWest or a balaclava on the London Underground, then the law should be applied to everyone equally. But have I ever said we should ban people walking down the streets from wearing religious dress or ceremonial dress? Absolutely not.

Q: But would you legislate on the burqa?

A: This is something that to some extent I've inherited. We are going through a major policy review at the moment. I do think everybody being equal before the law is important. But is it the sort of thing we should be legislating for? I'm dubious about that. When you become the leader of a political party, you inherit an awful lot. You can't change it all at the stroke of a pen or overnight.

Q: But at the time of the last election you were defending that position in interviews.

A: I was defending it in exactly the terms I've given: NatWest bank, the London Underground, but not walking down the street.

Q: But in NatWest bank they don't let people in in a motorcycle helmet because it might be an armed robber. Armed robbers tend to be male.

A: Listen, I'm not looking to pick a fight with any ethnic minority in this country at all. Absolutely not.

Q: So is that a policy that you will be happy to ditch?

A: It's a policy I'm going to look at.

Ukip's strategy before the 2015 general election

Q: After the recent EU summit, you said: "Britain is going to make the great escape. We are going to get out of this union." In practical terms, how do you think that is going to happen?

A: We've conned ourselves for nearly four decades that we have some extraordinary influence within the EU, that we're a big player at the top table. That to me, in the 12 years that I've been there, has never been self-evident, but that's what we've always believed. Last Friday that changed, because there was a realisation that we hadn't got a friend in the room.

Q: But how do you think Britain will get from here to actually leaving the EU? You'll need a government with a majority that calls a referendum.

A: The referendum is by far the most likely route.

Q: So how do you see that happening?

A: It is most likely that it will be the Conservative party, although you never quite know what the Labour party could do on this issue. At the moment it appears to be very, very Europhile, under Ed Miliband, although we do know that Ed Balls and others have slightly different views. I think the pressure within the Conservative party for something radical to happen is very great indeed. Secondly, I think the pressure that Ukip can exert is enormous.

We've spent most of our life being a party with a Labour government. Over the years we've drawn our support from quite a wide spread. Even Guardian research showed a few years ago that 51% of Ukip voters were Tories. The other 49% came from classical liberals, patriotic old Labour and people who otherwise would not vote for anybody. So our effect on the electoral process up until now has been very mixed.

Q: But at the end of the day you need a majority government at Westminster.

A: Well, here's the argument. The Tories are now in. [David] Cameron, I don't think, intends to deliver on these big promises; you know, the referendum, cutting immigration, human rights. I don't think he actually meant any of those things. Now what will happen as Ukip grows, and I believe that it will, is that we will disproportionately start to take more votes away from the Conservatives than from other parties. And you get to a point where, if it's pretty obvious to Cameron that he simply can't win the next election because of that number of people who are not going to vote for him but are going to vote for us, that leads to rebellion in the Tory party.

Q: But what happens then?

A: What happens then is that if he wants to win the next election, he has to call a referendum on the issue.

Q: And if you get to that stage, do you then say: "Great, we've got what we want, we'll tell Ukip supporters to back Conservative candidates"?

A: The difficulty with that is, are we going to believe them? So we would like to see it happen before the general election. If it's a promise in the general election, then there will be very divided opinion within Ukip as to what we should or shouldn't do.

Q: And what's your personal opinion?

A: I don't know what's going to happen. I just feel that it is more than likely, particularly if this electoral timetable works the way that it looks to be working – ie, we go to 2015 – the year after a European election in which I think Ukip can do something quite dramatic, I think we've got every chance of forcing [Cameron] into giving us a referendum.

Q: But do you then tell your party: "We want a Conservative majority government, let's form a pact"?

A: I did actually make that offer last time round, if you remember.

Q: So would you do it again?

A: We'd have to see. I don't know. It is some way down the track. My effort and energy and focus is on building up Ukip as an electoral party, Ukip as an operation. That will be a huge decision as and when the time comes.

Q: But wouldn't it make more sense to do that than to actually put up candidates against the Conservatives?

A: That depends on whether we think [Cameron] is telling the truth. If he promises a referendum, is he actually going to deliver that referendum?

Merging with the Conservative party

Q: At some stage in the future can you ever see the Conservative party and Ukip merging?

A: I think it's unlikely. Ukip is a small-government, libertarian political movement. The Conservative party, under its current directorship and governorship, resembles more of a social democratic party. So, at the moment we're such a long way apart. Down at the ground level, of course, there are similarities between many of their activists and many of our activists.

David Cameron

Q: Two months ago in the Evening Standard you said Cameron had shown himself to be "the most pro-EU Conservative prime minister since Edward Heath". Do you still think that in the light of the veto?

A: Well, he had no choice, did he? If we examine the record up until the veto – not that it was a veto, really – his first act was to overturn Michael Howard's "let's take our fishing waters back" policy. He has actively supported the creation of a European foreign policy, which is something that is astonishing to many Conservative voters. He has actively encouraged the eurozone to move towards a full fiscal and political union – again, something that most Conservative voters would find astonishing. He had been a very, very pro-EU prime minister until last Thursday.

Q: And you still think he's the most pro-European Conservative prime minister since Edward Heath?

A: In terms of where he wants us to be, yes.

Chances of becoming a minister

Q: Anthony Painter has written an article for Progress in which he speculates about Ukip winning 25 seats at the next election, the Conservatives having no overall majority, and Cameron having to do a deal with you, implying that you could become deputy prime minister. Can you ever see yourself being in government?

A: I don't make silly predictions for the future.

Q: So the idea of you being in government is a silly prediction?

A: I don't make silly predictions. I don't make any predictions. I travel optimistically. Listen, I see myself as a campaigner. I see Ukip, with me at the helm, as being a force for changing the national debate in this country, which I think we've been quite successful at in one or two areas. There are many other areas in which I would like us to be a catalyst for change. I'm not thinking about post-2015. That's just too far in the distance at the moment.

Ukip and Scottish independence

Q: Ukip supports the right of people not to be governed by distant rules in foreign countries. On the basis of that, one of the people who put a comment on the blog [ArseneKnows] said: "Will you be supporting the SNP in their fight for Scottish independence from a union forced on them by an undemocratic elite, albeit in 1707?"

A: Look, the future of Scotland is absolutely for the people of Scotland to decide. I just wish they were having a more honest debate.

Q: What do you mean by that?

A: Well, there's not very much point in Scotland leaving Westminster and going in under Brussels. [Alex] Salmond has really danced around this question. If he signs an accession treaty for Scotland, he will be committing them to joining the euro. But am I happy to see the United Kingdom become more of a federal model? Yes.

Ukip and English independence

Q: Can you ever see Ukip changing its name and becoming the English Independence party [as Dapper asked on the blog]?

A: Well, we do have representation in Wales. We do have a councillor or two in Northern Ireland. The place where we've really struggled has been Scotland. It has been very difficult for us to get off the ground in Scotland. And that's because the independence debate there takes on an entirely different connotation. So do I see us becoming English only? No. But do I see us being a party that is campaigning for an English parliament and for a fair deal for England and for a new federal structure for the union? Yes.

Changing Ukip's name

Q: What about changing your name to make that more obvious?

A: Rebranding is something that we've discussed many, many times. The big difficulty with rebranding is that it has taken us an awful long time to get Ukip established in people's minds. If you say Ukip, they know what Ukip is. To rebrand, you would need two things; one, a very, very clever replacement and, two, vast amounts of money to reach the same level of market penetration that we've currently got now.

Ukip's future if Britain ever left the EU

Q: If Britain ever left the EU, would Ukip ever wind up and cease to exist?

A: In electoral terms, the USP [unique selling point] that most people know Ukip for will have gone and it will make it much harder for Ukip, much, much harder for Ukip. However, there are so many other things that Ukip is trying to talk about, in terms of sensible, genuine, managed migration policy, in terms of a free enterprise agenda, in terms of Britain's role globally. There are a whole host of things for Ukip to campaign on, post EU. Quite what form that takes, it's difficult to say.

Britain outside the EU

Q: Let's move on to what Britain would be like if we ever did leave the EU. I got several comments on the blog from people [like deadinthewater and Cosmonaut and JonathanCR] who wanted to know what would happen to Britons who wanted to work in the EU. One person who said they would consider voting Ukip [FirmbutFair] said: "What guarantees can you give that, as part of your negotiations, you would keep the rights of UK citizens to move freely around and work in the remaining Union?"

A: Well, we were moving pretty freely around Europe pre-1973.

Q: The world has move on a lot since then.

A: Interestingly, for the first 20 years of our EU membership there were no more foreign British workers in Europe than there had been before we actually joined the thing. The big change, of course, has come since 2004. That was when we admitted poor countries to the union, and that made a huge difference. As far as movement of workers is concerned, there is absolutely no problem in having reciprocal deals. What we object to, and have objected to since 2004, is a total open door to the whole of eastern Europe. That, at a time of youth unemployment at 21%, doesn't make any sense.

Q: Another question came from someone who wanted to know what you would do to protect expats living on the continent.

A: Remember, this is not an equal two-way street. There are four times as many EU workers in Britain as there are British workers abroad. That's the first point to make. Second, the majority of Brits living in Spain or France, or wherever they are, are people living on pensions or people with savings. They are pumping money into those economies. Spain benefits from the Brits being there. Does Britain benefit from there being 1 million Poles here? Well, you could argue that many of them are extremely hard working and very good at what they do. But the net effect of it, at a time of rising unemployment, is, I think, negative for this country.

Q: There is a lot of scepticism about your claim that Britain would be better off outside the EU. [For example, read manasota or Spoonface or RubberBaron]. Have you at any point sat down with politicians from the European commission, or from other EU countries, to sketch out what trade arrangements an independent Britain would have with the EU?

A: This is conversation we've had a lot. It began for me in 2001 with [Neil] Kinnock [then an EU commissioner]. I challenged him live on air, on the Today programme. I said if Britain leaves the EU, what happens in terms of trade relationships? He said he was making no threats, we would carry on doing business just as we do now. All the years I've been there, everybody has said if all you poor Brits want is a free trade deal, then that's very much on offer.

Remember, there is the argument of economic logic. Remarkably, the UK is the biggest export market in the world for both France and Germany. They sell us more than we sell them. We trade at a massive deficit with other EU states. There are 10,000 lorries every day that come from Folkestone and Dover into this country and bomb up the M20. And they're all full of foreign produce being sold in this country. Those lorries are going to keep coming.

Q: Under a Ukip government, what would be Britain's relationship with other international bodies, such as the World Trade Organisation [as Cosmonaut asked on the blog]?

A: Well, this is the exciting thing. One of the things that it has taken British business a long time to understand is that in terms of global trade we are neutered. When the WTO meets in a room like this, we have to leave the room. Tiny little countries are there at the WTO. If you look at the trade that is being negotiated on our behalf by the EU, you find that Switzerland – tiny little Switzerland – has more trade deals with the top 30 global economies than we do as part of the EU.

Q: You'd be happy to submit to WTO jurisdiction, but not EU jurisdiction?

A: Look, when you go to the WTO, or you go to Nato, you sit round the table as a sovereign government and you agree to do something, or you agree not to do something. When you are part of the EU, I, as the member state, give to you, as the unelected commissioner, the power to make that decision. They are fundamentally different things. There's no level on which you can argue that the EU is a co-operative structure. It's not a co-operative structure. It is an assimilative structure that takes power away from member states.

I would argue that we are a very globalist party. In terms of trade, in terms of looking to the future, in terms of what we think the potential for London is, we are the party saying we've got to stop being so small-minded and thinking that the beginning and end of the economic world is Europe. It jolly well isn't.