Nigel Farage has admitted two of his children have both British and German passports, which would allow them to take advantage of free movement rights post-Brexit, but insisted they feel British rather than European.

In a robust exchange with former deputy prime minister Nick Clegg, the ex-Ukip leader also suggested Britain had lost the second world war because the nation had been “bankrupted” and “our big imperial possessions started to disappear.”

Farage has four children, two with his wife Kirsten Mehr, who is a German national and has confirmed the couple separated last year.

His children would be entitled to German citizenship through their mother. Last year witnesses claimed on social media to have seen the former Ukip leader queuing at the German embassy, though his spokesman at the time denied Farage had been seeking citizenship.

In the exchange with Clegg, which features on the Lib Dem leader’s new podcast, Farage denied his children felt as European as they did British, although he added they spoke “perfect German”.

Clegg, whose wife is Spanish, said his three children held Spanish passports and asked if Farage’s children also had German and British passports.

“Yes. Yes. And that link to the German side of their family is clearly important to them but their identity, when it comes to a football game, it’s pretty clear which side they’re actually going to support,” Farage said. “Their mum may not.”

He added it was bizarre that the majority of the younger generation had been in favour of remain. “I’m astonished that the young people look upon the European Union as being this bright, shiny future. They will change their minds. What you can’t see is that the European project is disintegrating before our eyes.”

Farage said he felt the UK had been the loser in 1945. “We were the ones who lost everything.”

He added: “In many ways I am very bullish about Britain as it is right now. Yeah we’ve got our problems, our divisions, we’ve always had them. But there’s a great feeling.”

Clegg’s podcast, Anger Management, sees the former Lib Dem leader follow in the footsteps of his contemporary Ed Miliband, who hosts the podcast Reasons to Be Cheerful.

Future guests on Clegg’s show are set to include former chancellor George Osborne and football pundit and presenter Gary Lineker.