David Cameron insisted the UK should "fight" for its future inside the European Union rather than "quitting"
UKIP leader Nigel Farage has rejected claims that his EU referendum campaign is "increasing fear" and "encouraging racism".
The Leave campaigner said he took a very "pro-Commonwealth view" and believed it should be easier for skilled people from India and Africa to be able to work in the UK.
Mr Farage was appearing in front of a live TV studio audience before the British prime minister David Cameron faced the same voters, ahead of the 23 June referendum.
One questioner accused Mr Farage of being "anti-immigration" and claimed he was "scaremongering" and using "inflammatory comments" against "non-white" people.
But Mr Farage hit back, saying "lots" of them had voted for UKIP at the last general election and stood as candidates but did not say how many when asked.
"If we have an Australian-style points system rather than an open door to 508 million people then it will be better for black people coming into Britain who currently find it very difficult because we have this open door."
He added: "There is big support for this among the ethnic minorities in this country who know that our current open door policy is damaging all of our communities."
Mr Farage complained the Leave camp was being falsely "demonised" as racist, and he claimed the cost of being in the EU outweighs any benefits.
He rejected the warnings from economists and businesses about the potential economic harm Brexit may cause, claiming they had been wrong in the past on the euro.
Mr Farage also said GDP was not the only important measure and claimed the quality of life of voters was being ignored by a debate focused on the potential economic impact of Brexit.
David Cameron was later confronted by a questioner who told him immigration meant he could not get a doctor, had three children in one room and had seen his home town become a "no-go zone".
Mr Cameron said: "I would say really frankly that if we want to build houses, if we want to invest in our health service, if we want good schools for our children, we have got to strengthen and safeguard our economy.
"Coming out of the single market, which is what the Leave campaign want to do, that would damage our economy."
He went on: "There are good ways of controlling immigration and there are bad ways of controlling immigration.
"A good way is saying people can come here.. but they have to pay in before they can get out. And when it comes to immigration from outside the EU - which of course is more than half - we do put a limit on the numbers for economic reasons."
Mr Cameron also insisted the UK should "fight" for its future inside the European Union rather than "quitting".