Raheem Kassam, a former aide to Nigel Farage, has quit the race to become Ukip leader just three days after launching his campaign in a Westminster pub. He was running his campaign under the tagline Make Ukip Great Again.
Kassam said he has realised "the path to victory is too narrow" and urged his supporters to back former London mayoral candidate Peter Whittle.
Kassam revealed that he has not raised enough money for his leadership bid to be any more than a digital campaign based in Westminster, although he had enough funds for his deposit.
"To not feature at events all around the country would have made me a hypocrite, given how much I criticise the establishment for ignoring the country," he said.
He will encourage donors to choose what happens with the remainder of the campaign funds, suggesting either donations to the Royal British Legion or Help For Heroes charities, or donations to Ukip or Whittle's campaign.
"Those who want refunds are welcome to contact me", he added.
Kassam, who edits the right-wing news website Breitbart London, also complained of "disgraceful treatment by the media" and accused Ukip of treating the leadership election "like a coronation".
He said he has complained numerous times to Ukip chairman Paul Oakden about MEPs using party databases to "effectively campaign against me", insisting it was "ostensibly against the rules".
Kassam also said he would be pursuing a harassment complaint against a reporter from The Times. "I am tough and I can take it, but when Times journalists show up at my elderly parents' house at dusk, intimidating them, I draw the line," he said.
Kassam launched his campaign on Friday from behind the bar at the Westminster Arms pub, declaring that "amateur hour is over".
Reading from notes resting on the beer taps, Kassam insisted he was the "Faragist" candidate in the election before pulling himself a pint of Spitfire and drinking it. Ukip's only MP, Douglas Carswell, appeared to welcome the news, tweeting this shortly after the announcement:
Kassam's announcement comes after a fair few months of turbulence for the party.
Some people are discussing how indeed he is the "Faragist" candidate.
Nominations for the Ukip leadership are set to close at noon on Monday. Paul Nuttall and Suzanne Evans are now considered the most likely candidates to become the party's new leader.