Nigel Farage has officially stood down as the leader of the UKIP party.
During his speech at the Botany Bay Hotel in Broadstairs he criticised the first past the post voting system saying it was unfair for smaller parties.
Mr Farage said although today is tinged with sadness he feels happier than he has for years.
Suzanne Evans will be the new leader.
Nigel Farage is likely to step down as leader of Ukip if he loses his seat in South Thanet, creating a "real blow for the party", political journalist Isabel Hardman has told ITV News.
The assistant editor of The Spectator has heard from "a very good source" that the party have not won the constituency in Kent.
Hardman said: "If he doesn't win that seat then he will have to step down as Ukip leader because he said he would. In that case Ukip would be pitched into a leadership battle which would be very difficult for the party because Farage is a magnetic figure who has held the party together.
"Even though he has some very impressive people behind him, they're not quite the same as Nigel Farage - so it would be a real blow for the party."
Earlier, Mr Farage gave aninterview to ITV News in which he attacked the press before walking off.
A senior UKIP source refused to rule out defeat, saying it was still a very tight contest in South Thanet. He said he believed the exit poll putting Ukip on winning two seats was wrong, adding that the Eurosceptic party was poised to come second in a number of constituencies.
In Margate, Al Murray, who is standing in the guise of his patriotic character the Pub Landlord for his newly-formed party, the Free United Kingdom Party (FUKP), arrived at the count in front of a battery of photographers.
Dressed in his trademark burgundy blazer, Oxford-educated Murray spoke about rumours Farage had lost in South Thanet, saying: "Well, then we are all walking with history tonight."
He said he would welcome Mr Farage into his pub if it turns out he has lost, adding: "If he's drowning his sorrows tomorrow, then I will say, 'Oh well, mate, better luck in 2020'."
Nigel Farage said it would be "curtains" for him as UKIP leader if he lost South Thanet. The suggestions at the count are that the Tories have won. If he does stand down as leader, it might not be the end of his career. He's stood down as leader before, then came back. But UKIP would face an uncertain future without him at the helm.
Nigel Farage has finished runner-up in Thanet South, losing out to Tory candidate Craig Mackinlay by almost 3,000 votes.
Mr Farage, who has vowed to resign as leader if he failed to enter the Commons, polled 16,026 votes.
But the Tory candidate did better, winning the backing of 18,838, with Labour third.
Nigel Farage has insisted he has "never felt happier", with a "weight lifted off his shoulders".
UKIP launched its election campaign today, saying that many seats in Essex, Kent and Sussex were within its grasp. Tom Savvides talks to Nigel Farage and businessman John Coronado in Canvey Island
Backbencher Mark Reckless has become the second Tory MP in a month to defect to Ukip and trigger a by-election by quitting parliament.Read the full story ›
Ukip leader Nigel Farage confirmed he has thrown his "hat in the ring" to stand for the South Thanet seat at next year's General Election, but insisted, "I'm no shoo-in".
Farage, who previously hinted he would stand for election "somewhere near the sea," wrote in The Independent, "There will be hustings in the constituency the week after next at which the branch will decide who they wish to represent them".
"It may seem silly to some that the leader of a party would have to go through the process of being approved and selected but, I assure you, rank means nothing in Ukip," he said, adding, "I think I stand a good chance of winning".
Nigel Farage talked about the price of fame to our political correspondent Phil Hornby - he can't slope off for a quiet beer any more. He was speaking at UKIP's regional conference for the South East.