The EU's political mainstream must go into battle against a rise in populism that next year threatens to usher in the "most Eurosceptic, most anti-European parliament in history" and scupper hopes of long-term economic recovery, the Italian prime minister, Enrico Letta, has warned.

Calling on leaders to confront the issue with less than seven months to go until the European elections, Letta said that the growing popularity of parties such as the UK Independence party, France's National Front (FN) and Italy's anti-establishment Five Star Movement (M5S) was the "most dangerous phenomenon" facing the European Union.

If they were to win more than 25% of the vote next May, he warned, it would be the start of "very negative" trend that could have a potentially devastating impact on the continent's potential for growth.

"I believe the risk of having the most anti-European European parliament in history is being greatly underestimated," Letta told the Guardian and five other European newspapers, characterising the challenge as a "great battle" between "the Europe of the people and the Europe of populism".

The underlying issue facing the next parliament would be how to press ahead with continent-wide economic recovery, he said. "But if we want to move from the legislature of austerity to a legislature of growth, and we find ourselves with the most Eurosceptic, most anti-European parliament in history, this goal will be immediately crippled, halted."

After an unprecedented period of financial, currency and debt crises which has seen Euroscepticism soar in some of the EU's major countries, voters in all 28 member states will go to the polls between 22 and 25 May to elect a new European parliament that will sit until 2019.

But fears are mounting among Europhiles that, rather than the start of a new era of recovery, the election could saddle the parliament with its biggest ever bloc of MEPs who have, to varying degrees, anti-EU or anti-euro leanings.

One of the major focuses of pro-European concern is Nigel Farage's Ukip, which has hopes of becoming the biggest British party, alongside Marine Le Pen's FN, predicted by a French poll this month to win 24%, five points ahead of François Hollande's Socialists. Far-right parties in Poland, Austria, Hungary and Bulgaria are expected to perform better than 2009's election. In the Netherlands, Geert Wilders's anti-Islamic populism is doing well in the polls. Both the anti-euro Alternative for Germany party and the anti-establishment M5S are expected to win their first European seats.

Speaking from his grand office in the Palazzo Chigi, with a globe beside his desk and a miniature model of the leaning tower of Pisa on a side table, Letta said he had chosen to "sound the alarm" over the elections because he could not see any coordinated action aimed at tackling the rise in anti-EU populism. "I see that, yes, it's being talked about in European countries, but timidly," he said. "And above all I do not see a European initiative to combat this trend, this phenomenon, which seems to me to be the most obvious and most dangerous phenomenon."

For arguably the first time, he said, he and others in Europe would be looking closely at the results in Britain in May to see how Ukip performs. "A success of Nigel Farage's party would have very negative effects on the debate about Britain's exit from the EU," he said. "If one of the messages to come out of May's elections were that this party had placed first, it would certainly be seen as a step towards Britain's exit," he said, adding that he was "ferociously against" such a scenario. "On this issue [Britain's exit] there is a bit of superficiality in Europe … This time, I believe, it could really happen."

Letta, a committed Europhile who often speaks of his desire for a "United States of Europe", said that, rather than retreating from the EU, the best way to avoid further crises would be to reform European institutions to make them stronger.

"European citizens have to feel they are being represented by Europe and at the moment there is clearly a problem. This, I believe, is the winning issue for [M5S's Beppe] Grillo, for Farage, for Marine Le Pen, for all European populism – that, to the question 'Who represents Europe? Who represents us in it?' the response, unfortunately, is stuttering," he said, blaming the fragmented nature of European institutions.

He said the lack of institutional infrastructure, especially for eurozone countries, was an enormous problem and that the 17 – soon to be 18 – member states should have their own economy minister. He also said that if he had a magic wand he would merge the presidencies of the European commission and European Council into one unified role.

In the months leading up to the election, said Letta – who is a former MEP – member states needed to unite to fight youth unemployment, which in Italy rose to a new record of 40.4% in September, according to official figures released on Thursday.

But it was the handling of the ever-thorny immigration debate that the centre-left prime minister said could prove most decisive. "In many European countries an ill-judged handling of the immigration issue will mean the European elections will be lost," he warned.

Hitting out at Grillo, the former comedian and figurehead of M5S whose anti-establishment politics lean to the right on some immigration issues, Letta added: "It is not by chance that, in Italy, Grillo, who on many issues does not take rightwing positions, has completely sent his compass spinning on this issue … dividing his own MPs and a good part of his electorate because he knows that Italy is a sympathetic and generous country with a very humanitarian spirit, but in which the fear of difference is still a very big problem in opinion polls."

Earlier this month, Grillo rebuked two of his senators for having put forward an amendment to Italy's immigration laws after the Lampedusa boat tragedy in which hundreds of African migrants died. The M5S is also against the reform of citizenship laws that would make it easier for immigrants' children who were born in Italy to officially become Italian.

The M5S has never taken part in the European elections before, but in February's Italian election it made a spectacular breakthrough, winning 25% of the vote for the lower house of parliament. Grillo has repeatedly called for a referendum on Italy's membership of the single European currency, though it is unclear to what extent that sentiment is shared by his MPs and voters.

Letta, whose Democratic party (PD) was dealt a rude awakening by Grillo at the polls in February, admitted that mainstream parties could not absolve themselves of blame when confronted with the rising tide of populism. "I know that among the eight million people who voted for the M5S there are many voters who used to vote PD and the moderate centre-right groupings," he said.

"If many voters who used to vote for our parties made populist choices, I think we should be the first to question ourselves. In my opinion, 90% of the success of populist parties in Italy is not down to European issues or economic policies, but to a politics that took too much time renewing itself and cutting costs."

To bring back voters from the M5S, he said, the Italian mainstream needed to show it was "capable of reforming itself, and that [a storming of] the Bastille is not necessary".

Letta – the head of a shaky grand coalition with Silvio Berlusconi's centre-right grouping whose very creation was a cause of revulsion among many former PD voters – said constitutional reform was essential in Italy to change an electoral system he said would only serve to increase populism if it continued.

Mario Calabresi and Fabio Martini from La Stampa, Philippe Ridet from Le Monde, Andrea Bachstein from the Süddeutsche Zeitung, Pablo Ordaz from El País and Tomasz Bielecki from Gazeta Wyborcza contributed to this interview.