Nigel Farage, UKIP leader, on the BNP offer
UKIP says it has "unanimously rejected" an offer from the British National Party for an electoral pact at next year's European elections.
It says ex-tennis star Buster Mottram, a UKIP member who claimed to represent the BNP, made the "astonishing offer" at a meeting in London on Monday.
Under the deal the BNP would fight seats in the north while UKIP would focus on the south in the elections.
The BNP said a deal made sense. UKIP says it would not work with the BNP.
The UK Independence Party, which campaigns for Britain to withdraw from the European Union, says Mr Mottram has since been expelled from the party.
UKIP leader Nigel Farage said: "There are no circumstances, no possible situations, in which we would even consider doing any type of deal with the BNP whatsoever.
"I'm simply amazed that the BNP thought we would even consider such a thing, given that we are a non-racist, non-sectarian party."
He told the BBC there had been an attempt "over many months" to infiltrate and try to "demoralise" UKIP members into thinking there was no future without a deal with the BNP.
"We had worked out who those people were, that had infiltrated UKIP, we were on the verge of getting rid of them, and they began to panic so they thought they would play their trump card."
The party says it expects more people to leave within the next few months.
Mr Farage added there were "no circumstances whatsoever" in which UKIP would do a deal with the BNP.
"What is shows is frankly, they are desperate, they think that people that vote UKIP might be tempted to vote BNP and they are wrong on every count."
In the 2004 European elections, UKIP more than doubled its share of the vote to 16%, with 12 MEPs.
The BNP's vote share was 4.9% - more than 800,000 votes - although it failed to get a seat in the Brussels parliament.
But the BNP's candidate in this year's London mayoral elections came fifth with 69,710 votes and won the party's first seat on the London Assembly. UKIP's candidate came seventh with 22,422.
BNP leader Mr Griffin told the BBC it made electoral sense for the two parties to avoid standing against each other at the European elections in June 2009.
BNP spokesman Simon Darby said the approach had been made "with a view to ending this ridiculous situation of splitting the anti-Euro federalist vote".
"We are aware there are people very highly placed in UKIP who are very sympathetic to the logic that the vote could be split, that was where we were coming from.
"Someone has to take a lead on this if we are not to continue to be propelled into this federalist monster."
Two UKIP national executive committee members the party accuses of campaigning against Mr Farage's leadership were also expelled earlier.