Federal Opposition Leader Peter Dutton has not ruled out intervening in the Victorian Liberal Party after an exiled MP threatened to legally challenge her suspension.

Moira Deeming was suspended from the parliamentary party for nine months in late March after attending an anti-transgender rally in Melbourne where neo-Nazis performed the “sieg heil” salute.

On Thursday, Ms Deeming emailed Victorian Opposition Leader John Pesutto, demanding he agree to a media statement exonerating her of being a Nazi or Nazi sympathiser by 2pm or face legal action.

Ms Deeming confirmed she would make good on her threat in a follow-up email to colleagues, saying the leadership was unwilling to work on a solution because of her setting a deadline.

Mr Pesutto denied he ever said Ms Deeming was a Nazi or a Nazi sympathiser.

He confirmed it was “on the table” for her to be expelled from the party over her planned legal action.

“This is a very serious step if it’s taken but there’s already a number of things that the party room is considering,” Mr Pesutto told ABC News Breakfast on Friday.

“I will consult with them. I’m not going to air those publicly.”

Mr Dutton said he was considering federal intervention to deal with the growing issue.

“The whole mess needs to be sorted out sooner rather than later,” Mr Dutton told ABC Radio on Friday.

“It doesn’t help our brand. It doesn’t reflect on the broader party movement.”

• Deeming dispute threatens to engulf federal Liberals

Mr Dutton said that the Liberal Party’s internal battles were a distraction from putting pressure on the Victorian government.

“Whilst we’re a distraction away from [Premier] Daniel Andrews, he gets away with more stuff day by day,” he said.

Mr Pesutto said he was also frustrated at the internal warfare engulfing the state party.

“There’s going to be more of this, there are more challenges. There’s a small group who are determined not to let this process proceed. I will have that process proceed and my colleagues overwhelmingly support me,” he said.

“I’m calling on all MPs to get together and unify, and if they don’t there are processes the party always has at its disposal.”

He said any federal intervention constituted “organisational matters” for the party, but he was confident he was the right person to lead the Victorian division.

“As hard as it is and as difficult as it looks right now … this reform process will result in a strong party that is a good opposition and can become the government in 2026,” he said.

“It’s not going to be easy. I’m asking for time and patience.”

– with AAP