Rogue Victorian Liberal MP Moira Deeming could face expulsion from the party as early as next week after threatening to take legal action to reverse her suspension from the party room.
Victorian Liberal leader John Pesutto confirmed this morning that he was considering trying to have Ms Deeming expelled, as the fallout from her involvement with an anti-trans rights rally organised by activists Mr Pesutto alleged were associated with neo-Nazis continues to roil the party.
"That's on the table, it's been reported publicly, but I'm going to be consulting with my colleagues on this," Mr Pesutto told ABC News Breakfast.
"Obviously that's a very serious thing. We want to reform the party, we want an inclusive, welcoming party that's focused on being a good opposition and holding a corrupt government to account. We can't do that, if we're constantly distracted by one issue or another."
A motion to expel Ms Deeming could be circulated as early as Saturday, with a vote by the end of next week.
The threat to have Ms Deeming expelled came as federal Opposition Leader Peter Dutton admitted the Victorian party was not a credible alternative government and threatened to stage a federal intervention to resolve the crisis.
Pesutto calls for unity but threatens consequences for rebels within the ranks
Mr Pesutto expressed frustration at the damage to the opposition's public image caused by bitter internal warfare spilling into public.
"There's going to be more of this, there are more challenges. There's a small group who are determined not to let this process proceed. I will have that process proceed and my colleagues overwhelmingly support me," Mr Pesutto said.
"I'm calling on all MPs to get together and unify, and if they don't there are processes the party always has at its disposal. I think this is a very serious step if it's taken, but there's already a number of things that the party room is considering."
Ms Deeming was suspended in March after participating in an anti-trans rights rally that was gatecrashed by neo-Nazis.
Mr Pesutto had initially asked for Ms Deeming to be expelled from the party, but backed down after the MP defended herself in a partyroom meeting.
Ms Deeming claims that Mr Pesutto has reneged on an agreement to publicly exonerate her of any connection to neo-Nazis and to confirm her return to the party room following her nine-month suspension. She has threatened legal action to hold him to the alleged deal.
Mr Pesutto said he had never claimed Ms Deeming was a neo-Nazi or linked to neo-Nazis, and that he would not bow to her demands.
"I have said many times that what was put to the party room didn't include allegations that Ms Deeming was either a Nazi or a Nazi sympathiser, there were matters set out clearly in that and the party room endorsed that position. So I'm not going to rehearse that detail again," he said.
Loyalists say 'small fringe element' needs to be dealt with
Supporters of Mr Pesutto, including his predecessor as leader, Matthew Guy, have this week accused a small number of "terrorists" of wreaking havoc within the party in order to pursue their personal agendas.
Deputy leader of the Opposition in the Legislative Council, Matt Bach, said this morning there was a growing mood among his colleagues that Ms Deeming's place in the party would needed to be re-visited given Mr Pesutto's attempts to reform the party to be more inclusive and forward thinking.
"I think there's a growing mood in the team that this reform agenda that John's been talking about is so important," he told ABC Radio Melbourne.
"And I'm afraid there is a small, small fringe element within our party that we need to deal with and John Pesutto is determined to deal with."
He said there was no deal made between Mr Pesutto and Ms Deeming to publicly exonerate her as being linked to neo-Nazis, but he had repeatedly made it clear that that was not the nature of the allegation in the dossier.
"There was no need to correct the record and there certainly wasn't going to be, nor is there now going to be, any exoneration," he said.
"John's done everything, quite frankly, that he said he would do as a result of this process.
"Moira, however, is going ahead, apparently, to take legal action against him and I know my colleagues are looking on that very dimly."
Federal calls for Victorian branch to 'get its act together'
Speaking on ABC Radio National, federal Opposition Leader Peter Dutton expressed frustration at the dysfunction enveloping the state party and threatened federal intervention to resolve it.
"It hurts the brand and that's why it needs to be sorted out, it needs to be mediated so they can get back to their core business of putting pressure on, putting a spotlight on, a corrupt government," Mr Dutton said.
"I wouldn't rule out federal intervention and I make it very clear to the Victorian division I want this mess sorted out as soon as possible."
Federal Liberal frontbencher Sussan Ley said she agreed with Mr Dutton's frustration with the turmoil in the Victorian Liberal Party.
"Of course, the Victorian division does need to get its act together so that they are a strong and credible alternative to Labor," she said.
Ms Ley wouldn't weigh into arguments about whether Ms Deeming should be expelled.
She said she did not know of any previous federal Liberal Party MPs taking legal action against their colleagues.
Former Liberal strategist Tony Barry described the situation inside the party as "a total disaster".
"The Victorian Liberal party is like the space shuttle Columbia slamming into the Hindenburg then landing on the deck of the Titanic," he said.
Mr Barry said there had been internal trouble in the state administration for a decade but it was getting worse and required major intervention from the federal level of the party.
He also called for the all MPs who were behind the internal warfare to be kicked out.
"They need to expel those destructive forces inside the parliamentary party room that are undermining the leadership and constantly putting us through this cycle of losing," Mr Barry said.
