Vernon Round, whose daughter Vicky was groomed from the age of 11 by men of Pakistani origin, said the English Defence League (EDL) and Britain First had been using her image for racist means.
He also believes that it was “incompetence” rather than political correctness that allowed gangs to sexually abuse children in the Shropshire town.
On Saturday, UKIP leader Gerard Batten told a rally that child grooming scandals were “covered up” because people were afraid of being called racist and Islamophobic.
Sky News filmed the protesters clashing with police during the march.
Mr Round’s daughter died at the age of 20 after becoming addicted to drugs and alcohol.
He told Sky News: “I didn’t like the fact that the EDL used my daughter’s picture and I made sure they took down the banners and made it known to everyone that I didn’t want them using her picture.
“Britain First – they had the pictures of Vicky as well.”
Mr Round said both groups respected his request to stop using the photographs but “it took them a while”.
Seven men of Pakistani origin were jailed in Telford in 2013 following Operation Chalice, a police investigation into child abuse in the town.
Mr Round’s best friend, Ray Afsar, who is from the Pakistani community, believes groomers from towns such as Telford, Oxford and Rotherham are linked by criminal networks.
He said: “Nobody looks really deeply into it but if they did they would probably find that all these Pakistani men all over the country are in one way or another linked.
“It’s just like when you go to a Pakistani wedding. There’s five or six hundred people there. They come from Bradford, Sheffield, Manchester, Birmingham.
“And it’s the same, these people have got relations all over the country and they’ve maybe got together to meet some of the victims and they think ‘this is a good idea, we can be doing this’.”
He added: “It’s only a tiny percentage of Pakistani men who brand themselves as Muslims but they are not, because they don’t have a conscience, because if you have a conscience you don’t do things like this.
“They have ruined the reputation of this town. They bought Islamophobia and hatred for all Pakistanis.
“People who are haters have got another reason to hate Muslims.”
Mr Round admits that when he first learned his daughter had been abused he was “a bit worried” that he could not trust his friend.
However, he now believes his friendship with Mr Afsar has helped him come to terms with what happened to Vicky.
“Without Ray I wouldn’t be here probably,” he said. “I would have got into a lot of danger because I would have been accusing everybody, saying ‘I know you’ve done this’.
“He just made me rationalise everything.”
Mr Round dismisses claims that the crimes went undetected because of political correctness, instead blaming “incompetence” and a lack of respect for the young girls by people in authority.
He said: “I took my daughter to the police station umpteen times. As soon as I said to them ‘I think my daughter has been groomed by men’ they should have checked on it and investigated it straight away rather than putting it down to ‘oh it’s the lifestyle’, or it’s the parents fault for letting them dress a certain way.
“And it was the same with social services.”
In a statement, West Mercia Police said child sexual exploitation “has been a priority for us, and the focus of our resources, for many years”.
It added: “A great deal of work has been carried out to target the perpetrators and disrupt their criminal behaviour.
“Every concern raised, whether to police or other partner agency, is followed up regardless of whether there is any evidence child sexual exploitation has actually taken place.”