Victorian Liberal MPs vote to expel Moira Deeming after stoush with ...

Victorian Liberal leader John Pesutto has heralded a "turning point" for his embattled party, after it voted to expel controversial MP Moira Deeming from its ranks.

Key points:Moira Deeming will now sit on the upper house crossbenchLiberal MPs voted to oust the upper house member after she threatened legal action against leader John PesuttoFellow MP Renee Heath was stripped of her position as party room secretary

The vote on Friday morning brought to a head weeks of party tensions, which escalated on Thursday when Ms Deeming flagged a defamation lawsuit against Mr Pesutto.

Ms Deeming's colleague and fellow conservative Renee Heath was also sanctioned in the meeting over her taking of minutes in a partyroom meeting. Liberal MPs voted to sack her as partyroom secretary.

Liberal leader John Pesutto hailed the vote as a show of support for his leadership, despite more than a third of the party room voting against the motion to expel Ms Deeming. 

"We as a team are committed to being a disciplined, united, focused team," he said.

"We know that in order to be an effective opposition … we have to be an inclusive, welcoming and engaged party that's in touch with our local communities, talking about the issues that are relevant to them.

"Today I was very pleased with the strong support I obtained for that vision of the party. Reform isn't easy and reform does take time."

Fellow conservative first-term MP Renee Heath was demoted from her role as parliamentary secretary during the meeting.(ABC News: Danielle Bonica)

Mr Pesutto dismissed speculation about whether his leadership had been fatally weakened by the turmoil surrounding Ms Deeming.

"I'm very comfortable with the level of support I had today. That's a strong endorsement of a process that was very difficult, very challenging," he said.

Mr Pesutto said Liberal Party members would receive a detailed explanation of the events leading up to Ms Deeming's expulsion, but that he would not discuss them publicly.

John Pesutto has played down speculation the saga has dented his authority as leader.(ABC News: Danielle Bonica)

"This was about being part of a team, and I think that was operating in the minds of the people who made the decision today," he said.

"We appreciate that Moira was elected on a Liberal Party ticket, but we also have a responsibility to the broader Victorian people ... to be a welcoming and inclusive party."

The crisis was triggered when Ms Deeming attended an anti-trans rights rally on the steps of Parliament House in March. She was suspended from the party room for nine months over her involvement in the rally, which was gatecrashed by neo-Nazis.

Ms Deeming later denounced the actions of the neo-Nazis, rejecting suggestions the men were involved in any way with organisers.

The upper house MP initially accepted the suspension, but then pushed back, claiming Mr Pesutto had reneged on an undertaking to publicly state Ms Deeming was not associated with neo-Nazis.

Mr Pesutto said no retraction was necessary because "nothing" in a dossier circulated by him after her attendance at the rally "ever accused Moira Deeming of being a Nazi or herself having Nazi sympathies".

Moira Deeming, pictured in a file photo, did not attend today's meeting. (AAP: Diego Fedele)

Ms Deeming threatened unspecified legal action to challenge her suspension, then back-tracked, claiming she was referring only to mediation facilitated by lawyers, before finally threatening to sue Mr Pesutto for defamation.

"If you had contacted our client in an appropriate manner, investigated the events of 18 March 2023 in a meaningful way, or conducted yourself in a manner fitting your position as the Leader of the Opposition and the Parliamentary Liberal Party, the Motion [to expel Ms Deeming] should not have been instigated," a letter sent to Mr Pesutto by Ms Deeming's legal team stated.

"Instead of a balanced, considered and fair motion which reflected the events accurately, the Motion promoted a false narrative that the event was fuelled by racist and white supremacist rhetoric and ideology and supported and espoused Nazi ideology and that Mrs Deeming herself supported that rhetoric and ideology. Nothing could be further from the truth."

Deeming saga exposes divisions within Liberal Party

The internal tussle divided the parliamentary Liberal Party, with some MPs coming out in support of Ms Deeming and others loudly proclaiming their loyalty to Mr Pesutto and calling for her expulsion.

The war within the party has been characterised as a struggle between the moderate and conservative factions, with the moderates broadly backing Mr Pesutto and his self-proclaimed attempts to modernise a party that has crumbled in the face of premier Dan Andrews' domination of Victorian politics.

Liberal MP James Newbury has described elements within the Liberal Party as terrorists for undermining leader John Pesutto. (AAP: James Ross)

Ms Deeming was preselected for her upper house seat to replace controversial former Liberal MP Bernie Finn, who was expelled from the party last year for inflammatory social media posts, including calling for abortion to be made illegal in all circumstances.

Former Liberal leader Matthew Guy — who led the party to a crushing election loss last year — and MP James Newbury last week described some of Mr Pesutto's opponents within the Liberal party room as "terrorists" who were holding the party hostage. 

Federal Opposition Leader Peter Dutton, struggling to present the party as a credible alternative government at national level, has threatened to intervene in the dispute as the Liberal brand sustains further damage in Victoria.