A Tory MP has called for Vince Cable to resign after the business secretary compared the tone of the rhetoric Conservatives have used on immigration to Enoch Powell's infamous "rivers of blood" speech.

Nigel Mills, MP for Amber Valley and a noted Eurosceptic, claimed Cable had undermined his cabinet colleagues by making such an allusion on the Andrew Marr Show.

"It would be very hard for him to sit around the cabinet table having effectively compared his Conservative colleagues to Enoch Powell, which is an utterly ridiculous thing to have done," Mills told the BBC's Today programme.

Cable labelled Tory policies towards immigration from the European Union as populist and a reaction to the threat of Ukip.

"I think there's a bigger picture here. We periodically get these immigration panics, I remember going back to Enoch Powell and 'rivers of blood' and all that, and if you go back a century there were panics over Jewish immigrants," Cable said.

Meanwhile, some Conservative backbenchers including Mills, have aired worries about Romanians and Bulgarians that will be allowed into the UK to work from the 1 January 2014.

The lifting of immigration restrictions has proven to be a lightning rod for both Conservatives and Liberal Democrats that do not see eye to eye on the EU or Britain's immigration laws.

Mills said: "Mr Cable's always had a rather creative interpretation of what collective responsibility ought to look like but these comments, coming on the back of some would say completely sensible policy announcements by the prime minister to restrict welfare for people newly arrived here [who] can't claim until they've paid in – it just looks completely out of touch with the sentiments of most of the British people.

"What he said yesterday was ridiculously over the top and ill-judged remarks. We've tried to conduct this debate in a sensible manner especially at a time when the economy's still pretty weak and for him to use such intemperate language really is unacceptable," he added.

Divisions on Europe

Leading politicians in the coalition have been offering alternative statements on Britain's relationship with the EU and how liberal the UK's immigration policy should be.

Deputy Prime Minister Nick Clegg has dismissed Tory plans to introduce a benefits cap on European migrants that come to the UK as unlawful, unworkable and against the UK's national interest.

However, Prime Minister David Cameron has made it clear that he wants to take a harder line on immigration from the EU and the ability of migrants to claim benefits in Britain.