Tommy Robinson, who helped set up the English Defence League in Luton in 2009, said he no longer felt that street demonstrations were "productive".
The EDL started in response to a demonstration by Muslim extremists as soldiers marched through Luton.
The group has become infamous for street protests across the country, often resulting in violence as its members clashed with opposing groups such as Unite Against Fascism.
Mr Robinson said: "I recognise that, though street demonstrations have brought us to this point, they are no longer productive.
"I acknowledge the dangers of far-right extremism and the ongoing need to counter Islamist ideology not with violence but with better, democratic ideas.”