Kerry Smith stepped down as a candidate for South Basildon and East Thurrock after the Mail on Sunday reported leaked phone calls in which he made offensive comments about gay people.
Mr Smith told the BBC that his comments were no worse than the language in the TV comedy Only Fools and Horses.
UKIP said he was no longer a party member and "can do what he likes".
In a recording obtained by the newspaper, Mr Smith made offensive remarks about gay people, other UKIP members and Chigwell in Essex.
In his first broadcast interview since resigning as a party member, Mr Smith said ambitious people in UKIP needed to be "very, very afraid" in case more secret recordings existed.
Speaking to the BBC's Tom Barton, he said his comments were no worse than the language in the TV comedy Only Fools and Horses, and said he had been "too politically incorrect".
After apologising "unreservedly" he added: "My language, for the record, was no worse than watching an old episode of Fools and Horses to be fair. I come from the East End, the word was never offensive and if you talked politically correct where I grew up you were battered for being a boffin." He said this was no excuse.
Mr Smith said the constituency had "become a real farce as far as the national party's concerned".
Before Mr Smith was chosen last week, the former Conservative MP Neil Hamilton withdrew from the selection process for the seat after a letter querying his expenses claims was leaked to the media.
A UKIP spokesman said of Mr Smith: "He's not a member of the party. He can do what he likes. We don't recognise that story."

Carmarthenshire council voted in favour making Ysgol Llangennech, near Llanelli, a Welsh medium primary from September.
The move will not affect current pupils who can continue to learn in English.
A bitter debate took place in County Hall on Wednesday, with 38 councillors voting in favour of the proposal and 20 against.
Carmarthenshire council said it wanted to extend Welsh medium provision in schools, partly in response to census figures which show a fall in Welsh speakers in the county.
Speaking during the debate, Labour councillor Kim Thomas said the move amounted to "segregation...and at worst apartheid."
Parents opposed to the change said they will fight on, while those in support said the decision was "a huge relief".
An amendment to maintain a dual stream school at Llangennech, pending further discussions, was defeated.
A UKIP candidate who resigned on Sunday has said he may have been a victim of "black arts" within the party.
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Plans to remove English stream education at a Carmarthenshire school have been backed.