The selection of Anne Marie Waters, who founded the Sharia Watch pressure group, has polarized the party, with former leader Nigel Farage warning that UKIP will be "finished” if it places Islam at the heart of its agenda.
Other UKIP members are understood to share Farage’s concerns, with several pointing to Paul Nuttall’s divisive ‘burka ban’ during the general election as evidence that anti-Islamic policies are harming the party’s fortunes.
Water’s announcement as candidate has already resulted in senior official Mike Hookem resigning his position as party whip in protest, with the MEP stating that he could not "turn a blind eye” to her "extreme views”.
Hookem, who was himself mired in controversy last year after a fracas with the then leadership favorite Steven Woolfe, added that he could not support the views of the party’s chief whip, Stuart Agnew, who has declared his support for Waters.
"I strongly disagree with the views Ms Waters and Mr Agnew promote and I would like to put as much distance between me and them as possible," he said.
"If I were to continue in my position of deputy whip, I would be seen as supporting or at the very least turning a blind eye to extreme views and this is not something I am prepared to do.
"I am not a racist and have never campaigned on race issues. While I do believe in controlled immigration, this position is about 'space rather than race'; and I am not prepared to support someone who seeks to single out a section of our society simply due to their religious beliefs.
Waters, a former Labour activist, has previously described Islam as "evil”, and is running on a ticket that includes a ban on the full-face veil, the closure of all sharia councils and a temporary freeze on immigration.
Whilst her radical proposals have garnered support from the former English Defence League leader Tommy Robinson, Ukip MEP James Carver said he "sincerely hoped” she did not win the leadership contest.
"Her train of thought, I think is going about it the wrong way... there are many British Muslims in this country and that is a good thing,” he added.
Others, however, have defended her right to run, including leadership favorite Peter Whittle, who said the vetting process which authorized her candidacy been done "very rigorously”.
"Ukip has always been a party that does talk about issues that other people do not like to talk about," he added.
Speaking to The Sunday Telegraph, Waters said that her policies were supported by "millions of people”, adding that many of her UKIP colleagues had been cowed by the fear of not appearing to be politically correct.
"It’s up to him [Mike Hookem] if he wants to stay in the party or not. It’s disappointing that UKIP is using slurs and smears that have been used against it for years. There’s nothing racist about objecting to an ideology.
"So if I’m being called a racist, I’d suggest they don’t what a racist is. My views are not extreme. We have a veil of silence in mainstream politics, and that needs to stop. I know many of these people who say things in private conversations who won’t say it in public.”
Eleven candidates have been approved to stand in the leadership contest. Ballot papers will be issued on September 1 and the new leader will be announced at Ukip's conference in Torquay on September 29.
Source: The Telegraph