The former Belgian prime minister proclaimed he did not like the name of the European Commission because its sounds like something from the Soviet Union during his speech at the ALDE conference in Madrid.
Mr Verhofstadt said: “I never liked the name ‘European Commission’ anyway. It reminds me of the Soviet Union.
“We have to call it what it really is, or should be: the Government of the European Union.”
Czech European Commissioner Vera Jourova suggested Mr Verhofstadt had “no clue what it is like to live in a Soviet regime” as she hit out at his comments.
Ms Jourova told her liberal colleague not to take the rebuke too seriously.
Mr Verhofstadt was at the centre of EU criticism aimed at Foreign Secretary Jeremy Hunt after he compared the EU to the Soviet Union at the Conservative party conference in September.
Analysing Brexit negotiations, the Foreign Secretary asked Tory activists: “What happened to the confidence and ideals of the European dream?
“The EU was set up to protect freedom. It was the Soviet Union that stopped people leaving.
“The lesson from history is clear: if you turn the EU club into a prison, the desire to get out won’t diminish, it will grow – and we won’t be the only prisoner that will want to escape.”
The EU Parliament’s Brexit coordinator said Mr Hunt’s remarks were “offensive and outrageous” and would deeply disturb Winston Churchill and Margaret Thatcher in his own response to the Foreign Secretary.
Mr Verhofstadt added: “Those great defenders of European freedom and democracy, must be turning in their graves.”
Lithuanian Commissioner Vytenis Andriukaitis sent the Foreign Secretary a passionate Twitter message in criticism of his comments.
The EU official wrote: “I was born in Soviet gulag and been imprisoned by KGB a few times in my life.
“Happy to brief you on the main differences between the EU and Soviet Union. And also why we escaped the USSR anytime. Whatever helps.”
Mr Hunt defended his speech, suggesting it “was a passionate request and desire for friendship with our European neighbours”.
He added: “But what I was saying is if the attitude of the EU is that someone that wants to leave the club has to be punished, then that’s not consistent with European ideals.”