Dafydd Iwan is vice-president of Plaid Cymru

Mr Iwan, the current Plaid vice-president, said in an Eisteddfod speech on Thursday that people were leaving England for Wales to escape Indian and Pakistani immigrants who had settled there.

His comments provoked a furious reaction from the Labour party who said he should pull out of the leadership race.

But Mr Iwan said he was "looking forward to being president" and had no intention of quitting the contest.

The part of his speech on the plight of the Welsh language which sparked the furore came as he spoke about the number of English people wanting to move to attractive areas.

I'm not a racist and I have nothing against people from Pakistan and India Dafydd Iwan

Speaking to Radio Wales on Friday, Mr Iwan said he had been talking about the importance of keeping the Welsh language and Welsh communities alive.

"The great threat we have in our time [in rural communities] .... is people moving in to these communities in large numbers without appreciating that they have a language and life of their own," he said.

"The ultimate irony is that some of these people are coming there to avoid people from Pakistan and India in English cities.

"I'm not a racist and I have nothing against people from Pakistan and India, but these people who are moving in obviously have racist attitudes and that does not help the problem.

"People move to Wales to get away from other cultures without realising that we have a different culture in Wales."

Mr Iwan - an influential figure in Welsh language circles who as well as being a lay preacher is a folk singer and record company director - said people were welcome to move to Wales as long as they were aware of the culture.

It comes dangerously close to the kind of language of racial exclusion that is used on the far right Leighton Andrews

Asked if he would be bowing out of the presidential contest he replied: "No, certainly not. I'm looking forward to being president of Plaid Cymru."

First Minister Rhodri Morgan called Mr Iwan's comments "crass".

"The ethnic minority communities in Wales will not be happy about the implication that Wales is an ethnically pure, all-white country, when it clearly is not," he said.

Earlier, Rhondda AM Leighton Andrews had called for Mr Iwan to consider his position.

"I think this kind of language is totally unacceptable in somebody aspiring to be a national leader.

"It's a feeling of hostility to outsiders and it comes dangerously close to the kind of language of racial exclusion that is used on the far right.

"It's not the language potential leaders should use.

"I think he should apologise for his remarks and consider his position."

But Mr Iwan said Mr Andrew was using the situation for party political ends.

Mr Iwan has been a singer and composer for 40 years

"We have worked with the Labour Party to oppose all kinds of fascism and racism in Wales and we should carry on doing that."

Cynog Dafis, Mr Iwan's opponent in the race for presidency, defended the comments.

"It's hard to imagine a less racist person than Dafydd Iwan," he said.

"Throughout his career as singer and politician he has shown passionate and practical support to groups suffering from oppression and discrimination.

"My understanding of his remarks in his speech on Thursday afternoon is that he criticised the racist attitudes of some people.

"It is typical of Labour paranoia that they turn these perfectly innocent comments upside down and interpret them in a way opposite to their intention.

"Dafydd Iwan will pay no attention to their call for him to stand down from the leadership contest and I would support him in this."