The Itchen MP, pictured, said his party will only win over voters tempted by Nigel Farage’s poll surge by listening carefully to their genuine concerns.
Last week, one Labour MP in London attacked Ukip’s billboard campaign – with slogans such as ‘British workers are hit hard by unlimited cheap labour’ – as “racist”.
But Mr Denham told the Daily Echo: “It’s clear that calling Ukip racist is not helpful, because what we need to do is talk about issues their voters are concerned about.
“Doing that sort of thing simply blocks off those voters – they won’t listen to the rest of what you have to say.
“We’ve got a very strong record about employment rights, public services and the NHS which appeals to a lot of the people who may be thinking of voting for Ukip.
“They want to hear about our arguments for dealing with migration, for how we will improve migration – calling Ukip racist sets up barriers.”
The MP, who steps down next year, was speaking after delivering a seminar in which he warned Labour still faced a huge challenge to win back Southern voters.
Mr Denham, an Ed Miliband loyalist, heads up his party’s ‘Southern Taskforce’, which is charged with boosting Labour’s appeal in the Tory heartlands.
Speaking at the London School of Economics (LSE), he urged Labour against speaking about a ‘north-south’ divide – because it alienated southern voters who were far from wealthy.
And he said: “Our difficulty is that, outside the target seats, most voters don’t think about voting Labour – and most voters don’t even think we are talking about them, when we think we are talking about them.
“Many of my party colleagues insist on talking about a north south divide. We are simply not on the agenda for most southern voters.”
Speaking afterwards, Mr Denham said he fully backed Mr Miliband’s ‘cost of living’ agenda, which was connecting with southern voters.
And he said: “The south needs to make its contribution to ensuring that Labour wins the seats that it needs to win – and I’m confident the south will deliver that share of target seats.”
Asked about the comments, Mr Miliband said: “I think that John speaks a lot of sense about the challenges for Labour right across the country, including in the south.
“I think we have a very important message about the south and to the people in the south of England because the cost of living crisis is what so many people are facing.”