Mr Nattrass failed the test in August and was told he could not stand for the party in the next European elections. He then lost a legal challenge against the party.
He told Channel 4 News: “The process has been totally gerrymandered and fixed, so that only people who support Nigel Farage are being put on that list.”
Mr Nattrass, who has been a member of Ukip since 1997, said Mr Farage “doesn’t want distraction from the people he wants elected.”
He added: “Ukip is now a totalitarian party. Nigel Farage only wants people in the party who absolutely and totally agree with him. I’m regarded as a trouble maker.
“The party has done very well. We all do a lot of work but it now has a totalitarian regime because the leader only wants people elected who are his cronies.”
Ukip’s selection process involves a two-hour test, which includes public speaking, an interview and a written test. Applicants with the top grade are placed on the party’s national approved list of candidates.
In a statement, Ukip said: “We understand that Mike Nattrass MEP is resigning from UKIP (I have not received official notification of this at time of sending).
“I understand his disappointment at not being in the UKIP lists for the forthcoming election, but the shortlist was decided by a fair and comprehensive process and UKIP now has very many talented people coming forward, wishing to represent us.”