Kerry Smith, the former Ukip prospective parliamentary candidate (PPC) for South Basildon and East Thurrock, has quit the Eurosceptic party.
Smith will now sit as an independent councillor on Essex County Council and Basildon District Council.
He stood down as a PPC after the Mail on Sunday obtained a recording of him making offensive comments.
Smith described gay people as "fucking disgusting old poofters", referred to a woman with a Chinese name as a "chinky" and joked about shooting people from Chigwell in a "peasant hunt".
Smith, in the first instance, said he was sorry and noted that he was on strong painkillers.
But on Sunday he issued a statement outlining that he stood down from the role "to see the best" for South Basildon and East Thurrock.
Smith has now told the BBC that he has resigned from Ukip because he was "sick of internal backstabbers who hold minor roles in the party".
Former Conservative MP Neil Hamilton was the favourite to become the Ukip PCC for South Basildon and East Thurrock in October, after Smith was deselected.
But Hamilton endorsed Smith in his hustings speech after Channel 4 reported that it had seen a letter from Euro-sceptic party's finance committee questioning expenses claims made by Hamilton during the European Union (EU) parliamentary elections.
Hamilton accused party insiders of "dirty tricks" and claimed only a handful of people had access to the letter.
"The dirty tricks department of Ukip is alive and kicking and in full-swing," Hamilton said.
"Only a handful of people will have known about this letter, so it will be pretty easy to point the finger of suspicion as to who, or on whose behalf, the letter was leaked."
Natasha Bolter was due to stand for Ukip in South Basildon and East Thurrock before resigning and accusing Roger Bird, the party's general secretary, of sexual harassment.
Bird denies the allegations and has claimed that the pair were in a relationship.