Deputy Prime Minister Nick Clegg has accused Nigel Farage of trying to "make political points" after the shootings in Paris which killed 12 people.
The UKIP leader said the attack by suspected Islamists on satirical magazine Charlie Hebdo on Wednesday was "truly horrific".
He added, on Channel 4 News, it raised questions about what he called a "gross policy of multiculturalism".
Mr Clegg said he was "firmly grabbing the wrong end of the stick."
Mr Farage said there was a "very strong argument" that the events were a result of "a fifth column" which he said lived in Paris and London.
He said: "We've got people living in these countries, holding our passports, who hate us.
"Luckily their numbers are very, very small but it does make one question the whole really gross attempt at encouraged division within society that we have had in the past few decades in the name of multiculturalism."
Home Secretary Theresa May said the reference to a "fifth column" - which can refer to a faction inside a country working with its enemies to create instability - was "irresponsible".
She said everybody across society should be working to "ensure that we deal with and eradicate extremism, wherever it exists".
Communities and Local Government Secretary Eric Pickles said it was "utterly wrong" for any politician to make "political points" so soon after the attacks.
"If we fight among ourselves or see our neighbours of any faith as the enemy, then the only winners are the gunman," he warned.
Labour leader Ed Miliband said people "across faiths" were united in condemning the attack, and did not think Mr Farage "should be seeking to divide us in this way."
On his LBC phone-in, Mr Clegg said: "I am dismayed that Nigel Farage immediately thinks, on the back of the bloody murders that we saw on the streets of Paris yesterday, his first reflex is to make political points."
Quite right, Mr. Clegg. I think Farage's comments are very divisive and unsavoury and his desire to make political capital out of this tragedy is very tasteless.