Mr Farage will not be granted a security pass for the conference after accepting several invitations to speak at fringe events.
Any events he wishes to attend will now have to be held outside of the "ring of steel" which protects the main conference – setting up the prospect of a major sideshow developing which will distract attention away from speeches given by Tory ministers.
Mr Farage will address a fringe meeting organised by the Bruges Group, a think–tank whose previous president was the late Baroness Thatcher, which was set up to promote a less centralised European Union.
Lord Tebbit, the former Conservative chairman who succeeded Baroness Thatcher as president of the group, said it is up to the organisation to "invite anyone to speak who is of a Eurosceptic persuasion".
The subject of the fringe meeting, to be held at Manchester Town Hall, will be to discuss whether Ukip and the Conservatives are "allies or enemies".
The Ukip leader is said to have been "showered with invitations" for the conference and is expected to speak at a number of other events.
"I suppose my presence will be a bit controversial, but whatever happens I am sure most people in the audiences will agree with my policy positions," Mr Farage told The Observer newspaper.
His presence is unlikely to be privately welcomed by senior Conservatives who are still grappling with how to respond to the electoral threat posed by Ukip.
After previously attacking the anti–EU party, David Cameron has now insisted the views of its supporters should be respected.
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