UKIP donor Arron Banks has offered to become party chairman in order to bring about a "total rebrand".
Mr Banks said ex-leader Nigel Farage was UKIP's "biggest asset" and should be "engaged once again".
In a letter to current leader Paul Nuttall, he criticised UKIP's tactics in the Stoke Central by-election where Mr Nuttall failed to unseat Labour.
He said the party had wrongly adopted a "red UKIP" strategy, copying Labour policies on the NHS.
Mr Nuttall, who was elected in November, has vowed to attract disillusioned Labour voters to UKIP, and hoped to capitalise on Stoke voters' leanings towards Brexit in Thursday's by-election.
But he lost to Labour's Gareth Snell by 2,620 votes, securing only a slight increase in UKIP's vote share.
The current UKIP chairman, Paul Oakden, said after the Stoke result that it might be years before his party, which currently has one MP, can pick up another via a by-election.
In his letter to Mr Nuttall, Leave.EU campaign chairman Mr Banks, who also used a Sunday Express article to threaten to walk away from UKIP unless his demands are met, repeated his offer to become chairman in order to make it an "efficient, professional and ultimately electable party".
He said his first move would be to bring in a CEO from industry to oversee a new membership drive, install a new team of "trained professional agents" to focus on target seats and use input from the public to draw up new policies.
Mr Banks also called for a return to the fold for Mr Farage, who quit as UKIP leader after the EU referendum saying he wanted his "life back".
Mr Banks said his strategy would include "engaging Nigel once again in UKIP - he is our biggest asset and needs to become energised with the party once again and work with you to deliver UKIP MPs".
He added: "The party is at a crossroads. We have to be radical to become relevant once again."
In his Sunday Express article, Mr Banks called for senior figures he said were part of a "Tory cabal" to be expelled, saying: "These dullards aren't bringing in Tory votes, Stoke proved that, so what are they for?"
In response, Patrick O'Flynn, an MEP and Mr Nuttall's principal political adviser, told the BBC's Sunday Politics that his advice would be: "Donate and don't seek to dictate."
He said Mr Oakden was an "excellent" chairman and said the Leave.EU campaign had hardly been a "smooth-running brilliant machine".
"I'm always happy if people who want to give money and support to our party want to stay in the party but I think the best donors donate and don't seek to dictate," he said.
"Of course if they are expert in certain fields people should listen to their views, but to have a donor telling the party leader who should be party chairman, that's a non-starter."