The UK Independence Party's main financial backer wants Robert Kilroy-Silk installed as its leader.
Mr Sykes is backing the party's star candidate
Millionaire businessman Paul Sykes said UKIP's breakthrough in the European elections was down, in part, to Mr Kilroy-Silk's high profile.
And he said the party risked losing momentum unless it made him leader, in place of ex-Tory MP Roger Knapman.
But UKIP dismissed Mr Sykes's comments and issued a statement pledging their support to Mr Knapman.
Speaking on behalf of the party, Jeffrey Titford, the UKIP's European Parliamentary Whip, said:
"This party owes a great debt to Roger for the excellent leadership he has shown in the last two years.
"He has led us to our greatest ever electoral success in June this year and we look forward to his continued leadership.
"No single individual will decide who will lead this party. We are a democratic party and it is for the members to decide who our next leader will be but there is no vacancy for the foreseeable future."
Mr Sykes, who spent £800,000 on UKIP's European election campaign, was reported by the Daily Telegraph to be threatening to withdraw his financial support over the issue.
But he told BBC Radio 4's The World at One he had never "attached strings" to his political donations.
"I would have preferred the successful campaign we had at the European elections to have continued and I think Robert Kilroy-Silk was a first class lead candidate," he added.
He said the party was meeting next week to discuss the leadership - and he urged it to consider changing leadership.
"The party has got many members, its got many other funders, it has got some really good back room people.
"But I feel that him (Kilroy-Silk) coming to the aid of the party did definitely give us the profile to get across the message that Britain is no longer self-governing and we must return to it and get our powers back from Brussels.
"I think he articulated that message very strongly and I hope, in the fullness of time, he does become the leader, or the head man, in the campaign at the next British elections."
UKIP won 12 seats at June's European elections, beating the Liberal Democrats into third place.
It sat out two recent by-elections in the Midlands but Mr Kilroy Silk's plans to stand in Hartlepool later this month were scuppered by rules preventing an MEP running for the British parliament.
Earlier this week, Mr Kilroy-Silk told journalists at Westminster UKIP wanted "to change the face of British politics forever".
He said the party had anonymous donors standing by to bankroll UKIP candidates in marginal seats at the next general election.