There has been a shock development in the legal case against Victorian independent Frankston MP Geoff Shaw.

In a brief mention before the Melbourne Magistrates Court, the prosecution has announced it has dropped all dishonesty charges against him.

Mr Shaw is now in the clear with all charges dismissed.

Ten days ago a Melbourne magistrate decided to roll all of the charges into one and to consider Mr Shaw for a diversion program, which would have meant he could avoid a criminal conviction.

Then the following day, the court rejected that option and the original charges were reinstated.

Mr Shaw was facing 24 charges of misconduct in public office over the use of his government credit card and car.

If convicted he would have lost his seat, forcing a by-election that could have brought down the State Government.

Mr Shaw has held the balance of power in the Victorian Parliament since March when he defected from the Parliamentary Liberal Party.

Mr Shaw prompted uproar in the Victorian Parliament last week.

He moved a motion that led to the Labor Party accusing the Napthine Government of doing grubby deals to shore up its position in the lower house.

Mr Shaw expressed his lack of confidence in Speaker Ken Smith, telling the House he had “degraded” the Parliament.