Paul Nuttall's decision to contest the Brexit-backing Lincolnshire seat of Boston and Skegness is the "tip of the iceberg" when it comes to Ukip's troubles, a source close to Nigel Farage has told IBTimes UK.
The comments come after Ukip were almost wiped out in the local and metro mayor elections across England, Wales and Scotland on 4 May.
Nuttall has since gone onto claim that the Eurosceptic party has a "very bright" future. But Ukip lost all 16 of its Lincolnshire County Council members.
"Frankly, there is nothing they could have done in the face of a big national swing to the Tories," the Ukip leader said.
With Article 50 of the Lisbon Treaty triggered and Prime Minister Theresa May promising to deliver a Brexit, Ukip has slipped to just 6% in the latest YouGov opinion poll – well down from the party's 12.7% share of the vote at the 2015 general election.
Former Ukip donor and Leave.EU co-founder, Arron Banks, has urged Nuttall to launch a "Country Before Party" campaign. "Whereby Ukip would only put up candidates against Remain voting MPs, while not standing against MPs that had the courage to support Brexit," he said. "I hope Ukip voters will support them at this election whichever party they come from."
But despite Ukip facing a "death spiral", as former Ukip migration spokesman Steven Woolfe has put it, the source close to Farage denied that the party would slip into another round of in-fighting.
"[I'm] just not sure it can be immediately fixed," the source said. The party, meanwhile, is hoping to capitalise on the Conservatives' failure to meet their "tens of thousands" net migration promise.
The issue dominated the EU referendum campaign and is a weak spot for May, who was Home Secretary for six years. Net migration hit more than 273,000 in the year to September 2016, according to the Office for National Statistics.
"Ukip will have a policy of balanced migration. Zero net immigration over the next five years," Nuttall announced in Westminster, London, on Monday 8 May. The commitment comes just a month before the general election on 8 June.