UKIP leader Henry Bolton has been sacked after losing a no confidence motion at an extraordinary general meeting of party members.
Members backed the motion by 867 votes to 500 at the EGM in Birmingham on Saturday, giving him a 37% share.
Mr Bolton - who told Sky News he was "quietly confident" ahead of the meeting - had been clinging on to the leadership after a revolt by several senior party figures over his relationship with model Jo Marney.
He admitted he still had "strong affections" for the 25-year-old, who resigned from the party following allegations she had sent racist text messages about Prince Harry's fiancee Meghan Markle.
Despite losing the motion, Mr Bolton is still eligible to stand again in the forthcoming leadership contest, which will be held within the next 90 days.
When asked by Sky News whether he would run, Mr Bolton said: "I don't know yet. I've just spoken to my team, we've had a quick batting around of the different options. I'm not ruling out any option at the moment."
He said he was "slightly disappointed" to have lost the no confidence vote, but that he was "not finished with politics".
Responding to the possibility of Mr Bolton re-running, UKIP's leader in Wales, Neil Hamilton, told Sky News: "He could stand again, he's no stranger to humiliation."
He added that Mr Bolton would be "exceptionally foolish" to even remain a party member, and predicted a "swathe of members coming back to UKIP" as a result of his departure.
The party's national executive committee (NEC), which triggered the no confidence vote, has chosen Gerard Batten as interim leader.
"I hope that we'll have a period of stability and that Gerard will be allowed to remain in post as interim leader for an extended period of time," Mr Hamilton said.
"We still have to get a clean Brexit. The Government is bungling that by its own actions."
Party chairman Paul Oakden echoed Mr Hamilton's comments regarding the party's future, telling members at the meeting on Saturday to "keep the faith".
"We matter now more than we ever have," he said.
Mr Bolton had received the backing of Nigel Farage before the vote, with the former leader fearing another leadership contest would risk the party's "self-destruction".
Writing in the Daily Telegraph on Friday, Mr Farage said: "I believe it would be better to allow Mr Bolton, with all his faults, the chance to turn UKIP into an electoral machine again.
"The alternative is for the party to carry down the path of self-destruction into irrelevance.
"It may be too late to save UKIP, but you never know."
Whoever replaces Mr Bolton full-time will be UKIP's 10th permanent leader.
The bookies' favourite is East of England MEP Tim Aker, followed by London Assembly member David Kurten and - despite having insisted he will not return again - Mr Farage.
Interim leader Mr Batten - who told Mr Bolton to "get on with the rest of your life" following the vote - has not ruled out standing for the leadership on a permanent basis.
Mr Bolton was only elected in September, following the party's disastrous result at last summer's General Election under Paul Nuttall.