Andy Coulson conceded that the Ukip leader had a "bit of a point" when he argued victory for his party in 2014's european elections would make excluding him impossible.
The prime minister's former top spinner said in order to see off the threat from Farage, or "Mr Mirage", the Conservatives should challenge him to a head-to-head debate before 2015.
"The Conservatives should meet the Ukip debating challenge sooner and have Farage boxed off long before the first TV debate," he said.
"It should be led by a senior Cabinet member, not the PM ... Hague, as foreign secretary, is perfectly placed for some net practice on Farage's preferred playing surface of Europe."
Writing in the latest issue of GQ, Coulson said the Conservative Party needed to take Ukip "seriously" so as "to expose just how empty-headed it really is".
"Every utterance must be recorded and analysed, every speech given proper attention by some of the bigger, more ambitious young brains in CCHQ, every tweet matched where appropriate by a sensible question applying targeted pressure to Ukip policy," he said.
Earlier this year one of Ed Miliband's closest aides, Lord Wood, told The Huffington Post UK that Labour could agree to let Farage take part in the TV debates as the Ukip leader was now a "major figure".
Coulson's intervention comes as Ukip celebrates its 20th birthday - having been founded on this day in 1993.