John Pesutto: Victorian Liberal’s agree to $1.5m loan to former leader to settle defamation debt with Moira Deeming

A $1.5 million loan has been granted to former state Liberal leader John Pesutto, with the fractured party desperate to draw a line under a long-running defamation saga.

The Victorian Liberals’ administrative committee met on Thursday night and agreed to lend former leader John Pesutto $1.55 million to settle his debt to first-term MP Moira Deeming.

The Hawthorn MP was ordered to pay $2.3 million in legal costs to Mrs Deeming after the Federal Court found he defamed her by implying she was associated with neo-nazis.

It left him facing bankruptcy, which would have triggered his exit from parliament and a subsequent by-election in his marginal seat, unless the debt was paid back in a matter of weeks.

Mr Pesutto, who has already coughed up $315,000 in damages, had only raised about $750,000 through wealthy backers and a GoFundMe campaign.

An offer to defer some of the legal bill in exchange for Mrs Deeming’s guaranteed preselection and Mr Pesutto swearing off trying to return as leader for three years was rebuffed.

In a letter to party members on late on Thursday, Victorian Liberal president Philip Davis said the money would be paid directly to Mrs Deeming.

Mr Pesutto will be required to repay the loan at market-rate interest.

Mr Davis said the deal would avert a by-election and allow the Liberals’ parliamentary party to focus the issues that matter to the Victorian community.

“Settling this matter once and for all is in the interests of the party as it will see an end to the ongoing commentary that is letting Labor get away with their appalling performance,” he wrote.

“Victorians needs a change of government.”

Entering parliament on Thursday morning, Mr Pesutto was upbeat about the committee agreeing to his loan request.

“Tonight’s an opportunity to square (the issue) off and put it all behind us,” he said.

Mrs Deeming, who was expelled from the party room before being welcomed back in December, was sceptical it would end the infighting that has engulfed the party since March 2023.

“I assume that they will continue with their quest to try to annihilate me,” the upper house MP said.

Mrs Deeming said the party could “do what they like” but she would take any support of Mr Pesutto as a “direct rebukement (sic)“ of the court judgement.

Opposition Leader Brad Battin attended Thursday night’s meeting but would not reveal to reporters how he planned to vote.

Mr Battin urged Mrs Deeming and Mr Pesutto to “smell the roses” if either woke up on Friday morning unhappy with the outcome.

Time is running out for Mr Battin to unite the Liberals before the next state election in November 2026.