Carl Benjamin was announced as a European Parliament candidate for the South West England constituency this week following what Mr Batten claimed was an “exhaustive process”.
In 2016, Mr Benjamin tweeted “I wouldn’t even rape you” to Ms Phillips after she spoke of being sent rape threats.
Mr Batten defended the post on BBC One’s The Andrew Marr Show on Sunday, saying: “I think this was satire.”
He described the candidate as “a classical liberal” and a “proponent of free speech”.
The Ukip leader said: “I don’t know the exact context of that and I certainly don’t condone any remarks like that but he is not a bad person as he’s being portrayed.
“He is a proponent of free speech. The context that he said it was satire against the people he was saying it about. He wasn’t actually making a literal statement.”
Mr Benjamin – a vlogger who posts online under the name Sargon of Akkad – has close to one million subscribers to his YouTube channel, on which he produces videos criticising feminism, left-wing politics and the EU.
He sent the tweet to Ms Phillips after the Labour politician wrote on Twitter: “People talking about raping me isn’t fun, but has become somewhat par for the course.”
Following Mr Benjamin’s tweet, Ms Phillips said she was bombarded with “600-odd notifications talking about my rape” in one night.
After Mr Batten’s defence of the candidate on Sunday, Ms Phillips said her husband had asked her: “Is this man satire?”
A spokesman for Ukip had previously condemned Mr Benjamin’s rape comments, telling The Independent at the time he joined the party that the exchange with Ms Phillips was “unpleasant”.
The Ukip leader was also asked today whether he hates Islam, the religion he has called a “death cult”.
“I do not like the ideology, the literalist interpretation of Islam,” he replied. “I know lots of people in this country who do take a literal interpretation of Islam. I think that’s the worrying thing.”
He also defended his proposal that mosque building should be banned in the UK.
“What I have said in the past is that we should not allow planning permission for mosques until they allow planning permission in Islamic countries for churches, Hindu temples and other forms of religion.”
Mr Batten took over Ukip last year during a tumultuous period following the departure of Nigel Farage. The party has shifted towards the far right under his leadership and in November he appointed the anti-Muslim activist known as Tommy Robinson as an adviser.
Mr Farage, who launched his new Brexit Party earlier this week, has criticised his old party as linked to “extremism, violence, criminal records and thuggery”.