Nigel Farage is facing court action by an Asian former party member who alleges he was smeared by the Ukip leader.
Former Ukip MEP Amjad Bashir has sent legal papers to the party which demand an apology in court, backed by the threat of libel action.
It comes after Farage made comments which appeared to question's Bashir's mental state, following the latter's defection to the Conservative Party, little more than a year after winning his Yorkshire and Humber EU seat in 2012.
Farage told assorted media outlets in January that he was "increasingly alarmed" by Bashir's behaviour, adding he was surprised Bashir had been admitted in to the Tory fold. Ukip suspended Bashir, claiming publicly it was because of "unanswered financial and employment questions".
The disparaging remarks coincided with Bashir walking out of Ukip, slamming its "ridiculous" lack of policies and branding it "a vanity project".
Now Bashir has hit back, complaining he was given no warning by Ukip about what Farage intended to say and insisting their content left him "no choice" but to call in lawyers.
In a fuming letter seen by the BBC, Bashir's representatives told Ukip: "There can be no other conclusion that [the allegations] were published as part of a deliberate campaign on the part of Ukip and its most senior officers to discredit Mr Bashir in retaliation for his decision to join the Conservative Party.
"Contrary to the impression given by the press release, [Mr Bashir] had no forewarning of what Ukip had decided to allege."
Ukip declined to comment on the matter when contacted by IBTimes UK.