Ukip has done the Conservative party a favour by "cleansing" it of people with extreme views, a Tory MP says.

Robert Halfon accused Ukip MEP Gerard Batten of supporting a policy "literally akin to the Nazis" by suggesting Muslims should sign a charter rejecting violence.

In an interview with The House magazine, the Harlow MP claimed there was a "sinister element" to Nigel Farage's party.

Halfon also ridiculed former Ukip MEP Godfrey Bloom, who sits as an independent after calling women at a meeting "sluts" and hitting the Channel 4 News journalist Michael Crick on the head with a party conference programme.

Halfon said: "To me there are two kinds of Ukip – the Godfrey Bloom guy who's like a cross between Sid James and Bernard Manning, and then there's a much more sinister element, like the MEP who said every Muslim has got to sign a declaration of non-violence, which to me is literally akin to the Nazis saying Jews should wear a yellow star."

Halfon, whose Jewish grandfather was forced to flee Libya to escape persecution, said: "I genuinely find it abhorrent and frightening. I'm amazed that man is still an MEP. How someone could say such a thing and then not apologise for it …"

But he added: "In many ways Ukip have done us an enormous favour because they're cleansing people from the Tory party that had these kinds of views, which is great because I don't want people who have those kinds of views in my party. So good luck to them, really."

Halfon, who has called for the Tories to rebrand as the workers' party and called for the oak tree logo to be replaced by a ladder, said the Conservatives could not win a big majority unless they spoke for low-income workers.

He said: "I believe Tory modernisation should be about one thing and that is being the party for the working poor – for people on low incomes. And everything else should follow.

"We may get into coalition again, we may even win a small majority of 10 or 20 MPs, but we'll never have a big majority unless we have a real narrative and working people think that we are speaking for them."

He said he hated the term 'blue collar' to refer to workers. "It's patronising and it reminds me of those old Tory grandees who would come down from the mountains and say to the workers in the factories, 'have some bread'. I hate all that. I prefer 'white-van Conservatism'."

Farage dismissed Halfon's "hysterical slurs" and said his party could add the MP's Essex constituency – where he as a majority of less than 5,000 – to its list of target seats at the general election.

"Mr Halfon's hysterical slurs are the result of a growing Tory terror of Ukip's rising popularity all over the country," he said.

"Because I believe in taking politics and the big arguments directly to the people, Ukip will now be having a national action day in Harlow. Let the voters of Harlow hear what we have got to say. I know that many of them are already flocking to our side."