A likely contender to lead the Victorian Liberal Party has quit the front bench as the internal fallout from a major defeat in court threatens John Pesutto's hold on the position.
Liberal MP Sam Groth held several portfolios in the Victorian opposition but quit on Friday afternoon.
"I have decided to resign from his front bench," the first-term MP said.
"In good conscience, I can no longer continue to serve in this role."
Mr Pesutto lost a Federal Court defamation battle, with Justice David O'Callaghan awarding $300,000 in damages to former Liberal MP Moira Deeming after finding he implied she was associated with Nazis.
He made the defamatory comments in media interviews and a party expulsion motion following a March 2023 rally Mrs Deeming attended, prompting him to expel her from the party.
Mr Pesutto did not step down as leader following Thursday's verdict and doubled down on Friday after calls from senior Liberal MP Bev McArthur for him to test his leadership by calling a party meeting.
"I always had a determination to continue to lead," he said.
"There were scenarios but it's kind of pointless now to rehearse all of that ground; the decision has been made, the matter is concluded, we're moving on."
Mr Groth, who has been touted as a future Liberal leader, said he remains loyal to the party and his electorate and would continue to represent them.
He told the Herald Sun in July he had leadership ambitions. "I want to be premier, yes," he said at the time.
Earlier, Ms McArthur said Mr Pesutto should throw open his leadership position at a meeting of the state Liberals.
"John is confident of the numbers of his leadership, then he can test it out and good luck to him," she told reporters.
She did not go so far as to call for Mr Pesutto to step down, but said "there are many talented people" in the party who could lead.
Another senior Liberal MP conceded Thursday wasn't a "good day" for Mr Pesutto but denied his leadership was untenable.
"In terms of the parliamentary party going forward, he's the leader and is basically doing a good job," they told AAP.
"We've got the government struggling.
"He's holding them to account on the things that matter to people."
The MP suggested a group of about a "handful" of internal agitators remained "easily detected and predicted", and a special partyroom meeting to vote on a spill motion wasn't imminent.
The insider also said it was unlikely a special meeting would be called to deal with Mrs Deeming's possible re-entry into the parliamentary party, with the next partyroom meeting scheduled for February.
The loss is a "gift to the Labor party" after months of unsteadiness, Monash University politics lecturer Zareh Ghazarian said.
"The instability of the Liberal party makes this moment so very dangerous for their chances for the next election," he told AAP.
Mrs Deeming launched the legal action in December 2023, claiming Mr Pesutto defamed her by suggesting or implying she was a Nazi or Nazi sympathiser following the Let Women Speak rally.
The March 2023 event was attended by men in black who performed the Nazi salute on the steps of state parliament.
Justice O'Callaghan found Mr Pesutto defamed Mrs Deeming in a media release, two radio interviews, a press conference and in a party expulsion motion following the rally.
Mr Pesutto implied she was unfit to be in the parliamentary Liberal Party because she was associated with Nazis.
His defences of public interest, honest opinion and qualified privilege were also found to have failed.
The Liberal leader said his lawyers would review the judgment before deciding whether to appeal.
