Victorian Opposition Leader John Pesutto has been served with a fresh defamation threat by ousted MP Moira Deeming, as the party faces a byelection headache.

Lawyers for Mrs Deeming, who was expelled from the parliamentary Liberal party in mid-May for allegedly bringing discredit on the party, have issued a second defamation concerns notice to Mr Pesutto.

The 16-page notice contains an itemised list of claims, including that Mr Pesutto publicly accused her of being a Nazi sympathiser and associate and used the allegation to threaten and bully her with expulsion.

“Mr Pesutto’s accusations were false and seriously defamatory of Mrs Deeming personally and professionally and have caused serious harm to her reputation,” reads the notice, obtained by AAP.

“She is entitled to substantial damages as a result.”

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

Other sub-headed topics include Mrs Deeming’s attendance at the Let Women Speak rally in Melbourne, Mr Pesutto’s initial failed motion to expel her, disputed meeting minutes and a recent statement from the United Nations special rapporteur on violence against women and girls.

The letter was written by Mrs Deeming’s defamation lawyer Patrick George and addressed to Peter Bartlett, a Melbourne partner at law firm Minter Ellison.

To resolve the dispute, Mr George requests Mr Pesutto publish a pre-written apology to Mrs Deeming on his website and all social media accounts for 14 days, along with paying her compensation and legal costs.

Mr Pesutto’s office declined to comment.

It comes after the Victorian Liberal leader was blindsided by the sudden retirement of veteran MP Ryan Smith, triggering a byelection.

The former Baillieu/Napthine government minister has been the member for Warrandyte in Melbourne’s northeast for 16 years and his last day will be July 7.

“I have become increasingly uncomfortable with the growing negative tone of politics, both internally and more broadly,” Mr Smith said in a statement on Wednesday.

Mr Pesutto learned of Mr Smith’s resignation when he read his statement, which did not mention the party’s leadership team in a long list of thanks.

He refrained from criticising Mr Smith for exiting politics about seven months after being re-elected for another four-year term, sparking the first state byelection since 2017.

Mr Smith put his hand up to become party leader after the coalition’s election thumping last year before swinging his support behind Berwick MP Brad Battin, who lost to Mr Pesutto by a single vote.

He was then not included in Mr Pesutto’s shadow cabinet.

The Liberal Party has been beset by internal ruptures between conservative and more moderate members since the November state election, most notably from the Deeming saga.

Opposition Leader Peter Dutton flagged the prospect of federal intervention in the Victorian branch if it could not resolve its issues.

The Warrandyte poll could be held between early August and late September, after the coalition’s historic byelection loss in the nearby federal seat of Aston in April.

Mr Pesutto wants a woman to be considered for preselection, with 21 of the 30 Victorian Liberals’ MPs being men.

Federal Liberal vice president Caroline Inge is considering a run, along with former Kew MP Tim Smith after he didn’t recontest his inner-Melbourne seat following a drink-driving crash in 2021.

Labor’s previous Warrandyte candidate Naomi Oakley is waiting for Labor to decide whether it will contest the byelection before declaring her intentions.

-AAP