The chancellor says he respects Nigel Farage but the UKIP leader does not have "answers to the country's future".
George Osborne told the BBC the Conservatives had to listen to the "anger and anxiety" of those who voted for UKIP in Thursday's local elections.
UKIP gained 161 seats but Mr Osborne said the general election would be a choice between Labour and the Tories.
Labour, which gained more than 300 councillors, has defended its campaign amid some criticism from its own ranks.
Millions of voters took part in local elections in England and Northern Ireland, while European elections were held across the UK.
- With 160 of 161 English councils declared, Labour has gained 338 seats, the Lib Dems have lost 307 and the Conservatives have lost 231
- Eight formerly Conservative councils have gone to no overall control, some following UKIP gains
- Labour is set for its best performance in London since 1998. It took Hammersmith and Fulham, Croydon and Crawley from the Conservatives - as well as Amber Valley in Derbyshire
- But Labour lost Thurrock, North East Lincolnshire and Great Yarmouth to no overall control after UKIP gained seats on each council
- Despite UKIP's strong performance, it still does not control a single council and its projected national share of the vote is down on 2012
- The Lib Dems lost Kingston-upon-Thames to the Conservatives and Portsmouth to no overall control
- Turnout looks to have been about 36%
- Results from the European election will not be known until late Sunday
- Counting in Northern Ireland's local elections is continuing
- You can follow full coverage with all the latest updates at bbc.co.uk/vote2014
The BBC's projected national share of the vote suggests UKIP would have scored 17% in a country-wide election. Labour would have got 31% of the vote, just two points ahead of the Conservatives on 29% with the Liberal Democrats on 13%.
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UKIP's projected national share figure is lower than the 23% it got in council elections last year.
But, amid fears that the Conservatives could lose Westminster seats because of supporters defecting to UKIP, some Tory MPs have suggested a pact between the Conservatives and UKIP at the next general election. Prime Minister David Cameron has rejected the idea.
On BBC Radio 4's Today programme, Mr Osborne said: "The choice at the election is do you want Ed Miliband and the Labour Party in Downing Street, or do you want David Cameron and the Conservatives in government?"
He added: "We take very seriously the fact that people have voted UKIP. We respect that fact. We have to listen to people who voted UKIP. We have to listen to their anger and their anxiety."
'Good progress'Pressed on whether his respect for UKIP voters extended to Mr Farage, the chancellor said: "I respect Nigel Farage and the other leaders of Britain's political parties, but it doesn't mean that I agree with him. I don't think he has the answers to the country's future."
He also promised that his party would work "incredibly hard" to win an outright parliamentary majority in 2015.
In a subsequent speech to the ConservativeHome conference, he added: "There are too many people who share our values but did not feel able to vote for us on Thursday night.
"The modern Conservative Party will never dismiss or belittle the views of the people we aspire to represent.
"It is our task over the next year to convince them that we will deliver, that the decisive in-out referendum on Britain's membership of the EU will happen.
"David Cameron could not have been clearer. The Conservatives will not form a government, he will not be the prime minister, unless that referendum is assured."
Labour leader Ed Miliband has also faced criticism for his party's performance on Thursday, as it lost some seats to UKIP, despite gaining control of 11 councils,
Michael Dugher, shadow minister for the Cabinet Office, said Labour was making "extremely good progress" but that its members were "not complacent".
He told the BBC: "I'm pleased that we won in those key battleground seats.
"I'm realistic but I'm also aware that, in some of or heartland areas, we did lose seats to UKIP and that is an area where we're going to have to work much harder."
As the results came in on Friday, Lib Dem leader Nick Clegg identified a "very strong anti-politics feeling" among voters.
He urged activists to highlight Lib Dem policies like the "pupil premium" and increases to the threshold below which people pay no income tax.
Mr Farage hailed the results as proof that his candidates would be "serious players" in 2015's general election, in with a chance of winning representation in the UK Parliament for the first time.
The "UKIP fox is in the Westminster hen house", he said.
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