The party has been told to pay the sum over a defamation case brought by three Labour MPs against UKIP’s Jane Collins.
Sir Kevin Barron, Sarah Champion and John Healey, who all represent constituencies in or close to Rotherham, pursued the case over a speech Ms Collins made about the South Yorkshire town’s child abuse scandal.
Speaking in 2014, the Yorkshire and the Humber MEP claimed the three MPs had known about the sexual exploitation of children and had not intervened.
Last month, the High Court ruled UKIP “deliberately delayed” settling the case for “political advantage” ahead of the 2015 General Election.
On Monday, Justice Warby made the interim payment order of £175,000 in legal costs, sparking fresh speculation about UKIP’s financial future.
The party’s interim leader Gerard Batten was recently reported to have written to local UKIP branches across the country warning they need to raise £100,000 by the end of this month or face going insolvent.
In the 12 months to last June’s snap General Election, UKIP spent just £273,104, official figures revealed.
This was less than the Green Party, the Women’s Equality Party and the National Union of Teachers over the same period.
Former leader Mr Farage admitted UKIP faces “big financial problems” as he predicted the party will have to appeal the court’s order.
He told his LBC Radio show on Monday night: “The truth is UKIP is facing a real, real battle just to survive.”
A source close to the party told Sky News: “UKIP has no money and the idiots who got UKIP into this mess take no responsibility.”
In a joint statement, Sir Kevin, Ms Champion and Mr Healey said: “UKIP’s actions behind the scenes forced the costs of this case to soar and compounded the damage from Jane Collins’ unfounded and hurtful allegations.
“This deliberate strategy hugely increased the legal costs and it is right that UKIP are today held liable for a large share of these costs.
“UKIP used the unfounded allegations by Jane Collins for political advantage.
“At the highest level UKIP knew Jane Collins’ case was ‘hopeless’ but blocked any settlement in our favour before the 2015 General Election because they believed it would win them votes.”
Sky News is awaiting a response from UKIP.