No outcome after mediation between Pesutto and Deeming

Mediation between the Victorian opposition leader and a former Liberal MP threatening defamation action has failed to reach an outcome, setting the scene for a potential court showdown.

John Pesutto spent about three hours in mediation with Moira Deeming during his birthday on Tuesday and said the pair had "narrowed" on some issues.

The Liberal leader said lawyers for both sides would continue negotiations but he was confident any litigation brought against him would have "no merit".

"Mediations don't always resolve on the first day," Mr Pesutto told reporters at state parliament.

"Sometimes it takes some further discussions and I'm hopeful that can happen, but if it doesn't I'm very comfortable with the advice I've been given."

Mr Pesutto would not confirm whether he'd offered to apologise during the meeting but said a number of options were on the table.

"What I brought before the party room on the first occasion and what happened with the party room on the second occasion were comprehensively dealt with ... and there will be no going back over those outcomes," he said.

Ms Deeming was expelled from the parliamentary party following her participation in an anti-transgender rally in March that was gatecrashed by a group of masked men who performed Nazi salutes.

She has issued several defamation concerns notices to Mr Pesutto relating to his post-event comments, alleging he publicly accused her of being a Nazi sympathiser and used the claim to bully and threaten her with expulsion.

Mr Pesutto denies he accused the now independent MP of being a Nazi or having Nazi sympathies.

Last week, UK anti-trans rights activist Kellie-Jay Keen also issued defamation concerns notices to Mr Pesutto, deputy leader David Southwick, upper house leader Georgie Crozier and former deputy upper house leader Matt Bach.

Mr Pesutto did not reveal whether his party would cover his legal costs, describing the situation as "uncharted territory".

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