Guy Verhofstadt, the leader of the Alliance of Liberals and Democrats for Europe (ALDE) group of MEPs, said the foreign secretary's proposals would not work and were just "cheap soundbites" designed to mollify eurosceptic Tory MPs.
In a speech in Germany on Friday afternoon, Hague argued that national parliaments should be able to overrule unwanted legislation coming from the European Union. The foreign secretary said that only by devolving powers to national MPs, rather than MEPs, will Europe be able to restore the democratic deficit.
He told the Konigswinter Conference that it was time "to make the EU more democratically responsive" as "trust in the institutions is at an all-time low."
"Too often, the British people feel that Europe is something that happens to them, not something they have enough of a say over. That the EU is happy speaking but does not seem interested in listening. That the EU is sometimes part of the problem, not the solution," Hague said.
But writing for The Huffington Post UK on Friday, Verhofstadt, who is also a former prime minister of Belgium, said the case for directly elected MEPs was "even stronger" than in the past and that MPs "lacked the time and expertise" needed to monitor the European Commission.
"In the Conservative Party's internecine warfare over Britain's role and future in the European Union, it seems that considered and sensible policy options have been discarded in favour of knee-jerk reactions," he said.
"These kind of reactionary suggestions that are increasingly being thrown out as red-meat to satisfy rebel Tory MPs and Britain's increasingly populist press have little or no basis in reality.
"It is time that serious politicians, of all political persuasions start explaining the truth to the British public and stop raising false expectations of how the UK can unilaterally obtain exceptions to its membership conditions of the EU."
Verhofstadt said the answer to eurosceptic British MPs was not to "cave in and imitate their cheap soundbites and populist rhetoric" but to "redouble efforts to improve and reform how the European Union works".
He added: "It's a case of all hands on deck to plug the leaks and repair the sails, not abandon ship in the middle of a stormy sea."
David Cameron has promised to hold a referendum on Britain's membership of the European Union should he win the 2015 general election. In July MPs will be asked to vote on a Bill that would enshrine the commitment in law.