A coalition row has erupted over an advertising campaign that targets racially mixed areas with billboards that warn illegal immigrants: "Go home or face arrest."

Liberal Democrat ministers yesterday pressed the government to abandon the campaign, as the UK Independence party leader, Nigel Farage, surprised many by condemning the signs as "nasty".

The split emerged after senior Lib Dem figures complained about the failure of their cabinet members to stop Tory ministers from launching the pilot scheme. Vans carrying the government's abrupt message have been driven around areas of high immigration since Monday.

The campaign has been widely seen as a way for Conservative ministers to appear tough on immigration in the face of rising support for Ukip.

But after three days of disquiet among party activists and MPs, a senior Lib Dem source said the party's ministers would call for the posters to be withdrawn: "Ministers will be pushing for this to be stopped – it is not Lib Dem or coalition policy."

A party spokesman added: "These poster vans were not cleared or agreed by Liberal Democrats in government. We are totally committed to tackling illegal immigration but this is a disproportionate, distasteful and ineffective way to do it."

Vans have driven around the London boroughs of Hounslow, Barking and Dagenham, Ealing, Barnet, Brent and Redbridge carrying billboards as part of a week-long, £10,000 pilot that is meant to tackle illegal immigration.

The billboards showed residents how many illegal migrants had recently been arrested in their local area and carried a text number for overstayers to use to arrange their return home.

The posters read: "In the UK illegally? Go home or face arrest. Text HOME to 78070 for free advice, and help with travel documents. We can help you to return home voluntarily without fear of arrest or detention." If deemed successful, the vans could be rolled out across the country, the Home Office said.

On Thursday morning, Ukip's leader, who has previously been condemned by David Cameron for leading a party of alleged closet racists, said the billboards were insensitive. "What the billboards should say is: 'Please don't vote Ukip, we're doing something,'" Farage told ITV's Daybreak. "I think the actual tone of the billboards is nasty, unpleasant, Big Brother."

The Lib Dem party president, Tim Farron, said the campaign represented "the politics of division" and called for the billboards to be "shredded".

Sarah Teather, the former Lib Dem minister and MP for Brent Central, said constituents told her the billboards were reminiscent of some of the most offensive graffiti and signs seen at the height of anti-immigrant racism in the 70s.

"It reminds them of the things they used to see on walls in the 70s such as 'Paki go home'. The tone of the words on this van is similar to those signs in guesthouses that once told potential tenants: 'no Irish, no blacks, no dogs'," she said.

Teather said one of the vans drove past her office and had caused offence to those who saw it. "It is very difficult to tell whether this is deliberately insensitive or incompetently insensitive. I don't see anyone other than the home secretary and the immigration minister who wish to be associated with it," she said.

Officials said the campaign, which cost £10,000, would pay for itself if just one migrant returned home.

Some Conservative MPs have joined in the criticism. Douglas Carswell said: "The breathtaking stupidity of the people in charge of our immigration system knows no bounds. If they still made Monty Python, then the minister for silly walks would be proposing this. It actually is an indication of a weakness that we're having to implore people to leave the country."

The areas were chosen because they have either significantly high or below-average numbers of voluntary returns, meaning that the success of the pilot can be assessed, a Home Office spokesman said.

Leaflets have been distributed in areas where illegal migrants are "known to frequent", including newsagents, money transfer shops and internet cafes, it was claimed in a press release.

The immigration minister, Mark Harper, stood by the billboards earlier this week, saying the scheme was part of a package of immigration reforms being introduced this year, including restricting migrants' access to benefits and services.

A Home Office spokesperson said: "This pilot is about targeting people who are here illegally and giving them the opportunity to leave the country voluntarily and with dignity, rather than be arrested, detained and removed.

"Voluntary returns are the most cost-effective way of removing illegal immigrants and save the taxpayer money. This pilot builds on the government's work on voluntary returns, which saw more than 28,000 voluntary departures last year. This work is just another part of the reforms of the immigration system that have cut out abuse and seen net migration drop to its lowest levels in nearly a decade."