Coogan, who has been one of the most high-profile celebrities in the campaign against phone hacking, said on Newsnight yesterday evening that the Associated Press title "trades on people's worst fears".
"We chose the Daily Mail to be Alan Partridge's newspaper because it has the requisite level of pompous prurience and contempt for the weak and xenophobic attitude," said Coogan, who was accused of a "sickening case of hypocrisy" by the Daily Mail after his last appearance on Newsnight to discuss the phone hacking scandal.
"They creates the image of a Little England where people play cricket and drink beer and all the corner shops are run by white people
"That is not representative of reality. I don't think that something that trades on people's worst fears, as that newspaper does, and panders to their fears, I don't believe that it deserves to exist. If it went to the wall tomorrow, I'd be delighted.
"There are much better newspapers - it's worse than the tabloids. At least they wear their vulgarity on their sleeve; there is a certain duplicity in everything the Daily Mail does."
Watch Steve Coogan on Newsnight below:
Coogan was speaking in response to claims from Paul Dacre, the editor-in-chief of Associated Press, which publishes the Daily Mail, Mail on Sunday and Metro newspapers.
Dacre said that self-regulation in a "beefed up form" would be the "only way of preserving the freedom of the press" in the wake of the phone hacking scandal.
In a seminar on press regulation held ahead of Lord Justice Leveson's inquiry into hacking, Dacre also called on politicians not to drop the Press Complaints Commission, which was criticised for its response to the scandal at the News of the World.
However, Coogan said that the PCC, of which Dacre is the current chair, had failed in its duties.
"The Press Complaints Commission that [Dacre] tried to defend palpably failed in the single biggest test of its existence in the past 20 years with the hacking scandal. It did nothing," he said.
"The only reason that has come to the fore is because of the tenacity of certain celebrities and The Guardian newspaper that decided to pursue this."
After host Jeremy Paxman pointed out that The Guardian's involvement represented "fellow journalists operating under a system of self-regulation", Coogan said that he "didn't have a problem with those journalists, just the ones that do the muck raking".
At the seminar yesterday, Dacre also said that the best guarantee of a free press is a commercially-viable press.
Coogan responded: "Well a commercially viable press, a free press, a press led by the market, has led to the hacking of Milly Dowler's phone and the hacking of phones of victims of crime. That's what leaving it to the market does, that's what we get with that."
Coogan added: "All the Daily Mail are interested in is commercialism, it's selling newspapers. It's always about whose shagging who, it's not about trying to expose corruption.
"If newspapers existing to make money occasionally do things that are notable and laudable, but they make most of their profit from searching through people's rubbish bins then they deserve to go to the wall."
Asked why the subject of press freedom is so "hurtful" to him, Coogan replied: "I am not here because of me, I am here because of other people who are defenceless in the courts.
"There was the case of that tabloid journalist a few years ago who said, 'We ruin lives, that is what we do'. That was a rare moment of candour from one of the tabloid newspapers."
Also appearing in the debate was Louise Mensch MP, who was the subject of various lurid stories in the press about whether she has had plastic surgery, which actually derived from a piece in The Guardian.
Taking a more circumspect view, she said that human interest and "fluffy kitten stories" sell newspapers and this funds the more investigative journalism, meaning it was important to "roll with the punches".
"If I was a politician going around saying that I was a paragon of virtue and extolling family values and all the rest of it, then my personal life would be legitimate because I am trading off that to be elected.
"I write comedy, so if they think that my comedy is crap, then they are welcome to say so, but my personal life is nothing to do with them.
"Would Paul Dacre like it if I went through his bin? Or asked him what he gets up to in bed? It's none of my business and it's none of his."
He added: "They are going to have to be more inventive and creative in how they entertain people. I manage to entertain people without going through their bins."
> Steve Coogan: 'I will not let Rupert Murdoch's News Corp bury the phone hacking scandal'