"To speak of the European continent converting to Islam makes no sense because it is the people alone who decide consciously to be Christian, Muslim or to follow other religions," Archbishop Robert Sarah told the La Repubblica daily.
Kadhafi made his controversial comments on Sunday in front of 500 women paid to attend his lecture.
He was on an official visit to Rome to mark the second anniversary of a friendship treaty with its former coloniser Italy.
According to one of the women present, the firebrand leader had said "Islam should become the religion of all of Europe" and that "Islam is the last religion and if we are to have a single faith then it has to be in Mohammed."
Sarah, the Vatican's secretary of the Congregation for the Evangelisation of Peoples, said he was not particularly concerned by Kadhafi's remarks, labelling them "a non-solicited provocation lacking seriousness."
He said the "true danger for Europeans is relativism, the lack of attention to faith, the weakness of religion, indifference to the sacred."
These, he said, are "true enemies for our faith which could create a fertile ground for the eventual future penetration of Islam in all of Europe."
Sarah, who is in charge of the congregation's overseas Catholic missions, also lamented a lack of "reciprocity between Muslim countries and the West" and problems linked to "religious freedom in Muslim areas."
However, "in many countries like Mali, Guinea and in North Africa, the relationship between Christians and those of other religions are excellent," he said.
"This is why Pope (Benedict XVI) tirelessly continues to promote interreligious dialogue," he added.
Kadhafi ignited further controversy on Monday when he said that the EU should pay Libya at least five billion euros (6.3 billion dollars) a year to stop illegal immigration and prevent a "black Europe."
EU Commission spokesman on immigration issues, Matthew Newman, would not comment on the statement Tuesday but said the EU was trying to improve dialogue with Libyan authorities to prevent "irregular migration flows from Africa".
SIC: AFP