Mr Farage was quizzed over the poster, which depicts a snaking line of hundreds of immigrants arriving in Europe, after Ukip politician Diane Jones suggested on the BBC referendum debate last night that he had apologised for it.
Speaking in central London, Mr Farage said: “I apologise for the timing and I apologise for the fact that it was able to be used by those who wish us harm.
“But I can’t apologise for the truth. And after all, this was a photograph your newspaper carried, this was a photograph that all newspapers carried, it is an example of what is wrong inside the European Union.”
He said the decision by German Chancellor Angela Merkel to welcome so many migrants into Europe has “created divisions between countries”.
He made his comments following his final speech on the campaign trail urging people to vote Leave in Thursday’s referendum.
Speaking to press from all over the world and Vote Leave supporters in Westminster, Mr Farage branded the EU “a big business cartel”.
He said: “We find ourselves, for the benefit of tariff-free trade, having to accept unlimited free movement of people.
“We find ourselves prohibited from making our own deals with the rest of the world.”
Mr Farage accused Brussels of usurping control and sovereignty from the UK, and imposing EU law which “is supreme”.
His voice rising with passion and pulling out his passport from his jacket and waving it in front of the microphone - a signature move by the Ukip leader - he declared: “We don’t even have a British passport anymore” - raising a clap from his supporters in the audience.
He said: “Let’s stop pretending what this European project is - they have an anthem, they are building an army, they have already got their own police force, and of course they have got a flag.
“At the end of the day tomorrow when people vote they have to make a decision - which flag is their’s?
“I want us to live under British passports and under the British flag.”