UKIP leader Henry Bolton says he has ended his relationship with his girlfriend after she reportedly made racist comments about Meghan Markle.
He said their romance was "obviously quite incompatible" with his leader role but he had no intention to quit.
Jo Marney had sent texts saying black people were ugly and Prince Harry's fiancee would "taint" the Royal Family.
UKIP's chairman said it "remains to be seen" whether Mr Bolton would stay as party leader.
Ms Marney has apologised for her remarks, which were reported in the Mail on Sunday, and claimed they were taken out of context.
Mr Bolton, a former army officer, took over as UKIP leader in September, becoming the party's fourth leader in 18 months.
He said it was against UKIP's constitution "to be racist in any way".
But senior party members have questioned his judgement, calling his private life an "unhelpful distraction".
MEP Bill Etheridge, who stood in the last leadership election, has called on Mr Bolton to quit, saying he had "handled the situation appallingly badly".
"Now he thinks by throwing a relationship with this young lady under the bus, he can save his skin," he told the BBC's Victoria Derbyshire show. "Frankly it is another example of this man not knowing what he is doing."
Stark choice - by the BBC's Norman Smith
Henry Bolton faced a stark choice. Either give up his girlfriend or give up his leadership. After a weekend considering his options, he chose the former - saying "the romantic element of our relationship should end".
Whether that will be sufficient to safeguard Mr Bolton's position as leader is less clear. Some senior figures in the party believe since he became leader just three months ago Mr Bolton has failed to make a mark or get a grip of the party's problems.
Quite apart from Mr Bolton's position - he is UKIP's fourth leader since the referendum - the party is facing mounting financial pressure and a loss of members.
Above all it is struggling to find a role for itself since the Brexit referendum.
Mr Bolton told BBC Breakfast Ms Marney's "utterly indefensible" comments were made "some time ago".
While there was "some context to them" which will be revealed in time, he added that no context "defends or justifies" some of the comments, adding he was "appalled and shocked" when he first heard them.
Asked about the state of his marriage on BBC Radio 4's Today programme, he said he and his wife had lived "under the same roof" for about five of the 12 years they had been together and had been living apart since July when they reached a mutual decision that she and their children should move to Austria where she is working.
"We are still married, we are not legally separated at all... I have tremendous respect for my wife. She is an outstanding mother to our children but we have had difficulties."
Asked when he told his wife about the relationship with Ms Marney, he replied: "My wife did not know about it at the time it started. She knew three days into it. Jo Marney and I went out first on Boxing Day. I told my wife exactly what was going on the 30th."
Mr Bolton, 54, said the 25-year-old model had had her party membership suspended immediately after the party found out about the comments and he would support the outcome of an internal investigation.
The messages were sent three weeks before the couple began their relationship, according to the Mail on Sunday. They confirmed their relationship in a letter to UKIP supporters earlier this month.
Many thanks for your kind words. We all make mistakes. It’s how you deal with those mistakes and conduct yourself in the future that matters. ✌️— Jo Marney (@Jo_Marney) January 15, 2018
Responding to criticism, Mr Bolton said certain individuals "should start working towards the betterment of the party itself, working as part of a team rather than coming up with divisive and self interested comments".
UKIP chairman Paul Oakden told BBC News lots of party members wanted their say on what had happened, and there would be a "process" for this over the next week.
"Whether or not at the end of that, Henry will still be in a position that he wants to carry this forward with the support of the party remains to be seen."
Former deputy leader Peter Whittle said Mr Bolton faced a "crunch" meeting of the party's NEC next weekend at which he would have to show he had the trust of party officials.
"It is a very big task," he told Victoria Derbyshire. However, he said a fresh leadership contest would be "a hell of a distraction" at a time when the focus should be on May's local elections and seeing Brexit through.