Victorian Liberal MP Moira Deeming has dropped legal action against her own party, seeking to avoid disendorsement as a candidate ahead of the state election. Deeming withdrew her Supreme Court challenge against the Victorian Liberal Party president, Brian Loughnane, on Wednesday.

The legal action was initiated on July 3 after Deeming made an assault allegation against former leader Matthew Guy. The MP stated in a social media post that the injunction had achieved its intended purpose. She has submitted a 12-page statement to the party's state executive, including a mediation proposal that facilitated the withdrawal of the court case.

"The state executive, having all the evidence before them, can now decide whether to pursue medication or reconvene to disendorse me," Deeming said in her statement. She added that she had acted in good faith, respected confidentiality, and followed party policies and the law.

Deeming, who represents the Western Metropolitan Region in the upper house, is facing potential disendorsement following an allegation that Guy placed her in a "headlock" at a Macedonian gala dinner in May. CCTV footage of the incident, reviewed by police, concluded that no offense was committed. Deeming later clarified that she may have misunderstood the term "headlock."

Guy has publicly stated that Deeming owes him an apology and has vehemently denied any wrongdoing. Liberal Leader Jess Wilson declined to comment on Deeming's future candidacy while the matter was before the courts.

Sources within the party suggest that Deeming's supporters have grown "exhausted" by the internal issues. Pauline Hanson has also indicated that One Nation would not support Deeming as a candidate, citing her allegations against a Liberal colleague and her refusal to apologize.

In a separate defamation case, Deeming successfully sued former Victorian Liberal leader John Pesutto after he falsely suggested her association with neo-Nazi groups. This followed a rally at Parliament House that was disrupted by extremists.