The leadership contest, triggered by Farage’s resignation in the summer, brought to public attention a rift within UKIP.
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The MEP for the South East, who was the bookies favourite, won with 8451 votes out of 17970 votes cast.
She said Brexit represented “winning a heat” in her acceptance speech, with much of the fight still to come with the United Kingdom still having not triggered Article 50.
“I don’t have the same national profile as Diane, she is in the media and on the television an bad lot and a big part of any election is the recognition factor”. James, 56, beat four other candidates to be elected Nigel Farage’s successor.
Ms James insisted she was a “new leaf, new book, new era” but admitted Mr Farage would offer “help” and said she would be “absolutely nuts” to ignore it.
On Friday UKIP announces the victor of a leadership contest to replace Nigel Farage, the charismatic but divisive politician who took the party’s once-fringe anti-EU views into the mainstream.
Outgoing leader Farage thanked the party delegates at the conference for their support.
She told BBC Radio 4’s Today programme: “There are far too many schisms and divisions which I think at this point are irreparable”.
Speaking at Ukips annual conference in Bournemouth, Farage described Britain voting to leave the European Union – which he said was the culmination of his lifes work – felt like a fairy-tale that had come true.
James said UKIP was a “winning machine” but warned the party had only won a “heat” in the race to leave the European Union and the exit document was not yet signed.
Ms James said the Brexit vote had shown what a potent political force UKIP is, adding: “We are going to confound our critics, we are going to outwit our opponents, we are going to build on our election success that we have achieved to date and do more”.
The MEP, who shot to fame after only narrowly coming second in the Eastleigh by-election in 2013, came in ahead of Lisa Duffy in second, with Bill Etheridge in third, Philip Broughton in fourth and Elizabeth Jones in fifth. “It seems a freakish way to unite the party”, he said.
Farage said whoever does succeed him must make sure the party stays healthy and strong to pressure the government to deliver a hard Brexit which the British people voted for on 23 June.
“What a revolting image”, she said.
He is one of a number of high-profile figures in Ukip who have been frozen out by the Farage wing of the party – the wing which propelled Ms James to victory.
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Mr Farage said “some quite big surgery” was needed to get Ukip back into shape. “On her campaign website she asked, “Why am I doing it?” before pointing to Nigel Farage’s statement – “I want my life back!” – made after he stood down”.
