The campaign to become Ukip's next leader has sparked controversy once more after the emergence of a candidate accused of stoking up anti-Muslim hatred.

Anne Marie Waters' stance against Islam – a religion she has described as "evil" and a "killing machine" – has reportedly prompted a sizeable chunk of Ukip's MEPs to threaten to leave en masse should she be given a senior position in the party.

The proposed walkout of about 18 of the party's 20 MEPs could even include former leader Nigel Farage, the Huffington Post reported.

The threats came as Waters' race to replace Paul Nuttall as leader had reportedly been followed by the arrival to the party of about 1,000 new members in just two weeks.

This has caused panic among some Ukip figures, who fear the party is in the midst of being "infiltrated" by far-right activists who want to see Waters' strong anti-Islam manifesto victorious.

Her "For Britain" leadership bid – which boasts of modelling itself on Donald Trump's successful presidential campaign – puts front and centre her desire for "a Ukip that talks about Islam with honesty".

Launched on her website alongside a cartoon of Theresa May waving the black Islamic flag used by Isis, it goes further than Ukip's general election policies of banning the burqa and Sharia courts.

"We should acknowledge that the awful elements of the religion come from the scriptures themselves, and that every country where they have influence is a human rights disaster," she says of Islam in her manifesto, adding that the religion is harmful to free speech, law enforcement and women's rights.

Running on a pro-Brexit, low-immigration platform, she adds: "The rape, abuse, and humiliation of women at the hands of Muslim immigrants to Europe is too widespread to accurately record."

One unnamed Ukip source told the Guardian: "If Anne Marie Waters were to win then how would the party be distinguishable from the BNP or EDL? If it happened you'd see mass resignations. That's no great secret."

Anti-extremism charity Hope Not Hate, which helped disrupt her leadership campaign launch on Saturday (1 July) by pressuring the venue to cancel her event, has repeatedly accused Waters of developing links with the "extreme far right".

Waters – who has received backing from former English Defence League (EDL) leader Tommy Robinson – has become a prominent figure in the UK's and Europe's anti-Islam movement, with tens of thousands now following her on Facebook and Twitter.

She originally tried to launch her political career in earnest with the Labour Party, failing to be selected as parliamentary candidate for South Swindon – where she gave a Central Committee member of the Worker Communist Party of Iran as her personal reference – and later in 2013 for Brighton Pavilion.

Having failed to be elected to political office, she continued her anti-religion activism with One Law for All, which campaigns against Sharia and all religious laws saying they violate human rights.

Her resignation from the organisation in November 2013 saw the group later condemn and wash their hands of Waters, with it saying her departure came after "political disagreements on some key issues, including One Law for All's refusal to collaborate with the members of racist and far-Right groups".

Waters went on to launch Sharia Watch UK the following year, another anti-Sharia campaign group, which One Law for All accused of promoting far-right material and "racist hate politics".

In was in this context that Waters' critics saw the announcement of a 2015 event for which Waters is perhaps best know – a "Draw Muhammad" exhibition.

The event, which planned to feature cartoons of the Prophet Muhammad but was cancelled due to safety fears, was to feature Dutch anti-Islam politician Geert Wilders as guest speaker and was said by Waters to be about free speech.

But it was condemned at the time by anti-Islamophobia watchdog Tell MAMA as a stunt intended to "irritate and inflame" the Muslim community.

Having already left the Labour Party, the same year saw Waters run as Ukip's parliamentary candidate for Lewisham East in the 2015 general election, a campaign which saw her marred in controversy after she reportedly advocated a Trump-style ban on Muslim immigration.

"For a start the immigration will have to stop, the immigration from Islamic countries has to stop entirely, that is just the way it is," she reportedly told an undercover Daily Mirror journalist in the run-up to the election.

"A lot of people need to be deported. Many mosques need to be closed down. It really has to get tough".

Another failed bid to become an MP and her desire to see a public movement against Islam saw her later launch protest group Pegida UK with Tommy Robinson, the former leader of the English Defence League (EDL).

The group's anti-Islam marches in Birmingham last year failed to attract large numbers and Waters quit the group to stand again for Ukip in Lewisham East in the 2017 general election.

She was deselected, however, after leader Nuttall criticised her anti-Islam comments.

Waters, who has praised Front National leader Marine Le Pen, has since accused Ukip of suffering a "wide gulf between the leadership and the grass roots".

She has argued that Ukip could regain support if it had the "guts" to be "honest about Islam".

But her critics say what may have first been a moderate left-wing critique of Islam has now morphed into radical anti-Muslim hatred, for which she has forged links with dangerous far-right groups in the UK and Europe.

"This is our chance for Ukip to challenge Islam," is the message she gives to her hopeful supporters.

But faced with strong opposition from senior Ukip members, it's uncertain how far her mission to turn the party into an anti-Islam movement will go.

An earlier version of this article described Anne Marie Waters' immigration policy as "anti-immigrant". This has now been clarified and amended.