Liberal MPs voted on a motion to expel Ms Deeming for "bringing discredit" to the party, at state parliament on Friday morning.
Ms Deeming was a no-show after lawyers served Mr Pesutto a defamation concerns notice, threatening court action if he did not immediately withdraw the motion, publish an apology to her on his website and pay her compensation and legal costs.
Mr Pesutto entered the party room flanked by Cindy McLeish, Roma Britnell, Georgie Crozier, Michael O'Brien, David Southwick and Matt Bach.
"The party needs to move forward," Mr Pesutto told reporters.
Ms Crozier, the opposition's upper house leader, said Ms Deeming's threat to Mr Pesutto was "extremely disappointing" and wouldn't be drawn on whether she should be booted from the party altogether.
"There is enormous disappointment from the parliamentary MPs, my colleagues ... and many many Liberal Party members who have contacted me," she said.
Backbencher Beverley McArthur, a conservative factional ally of Ms Deeming, was one of the only Liberal MPs willing to publicly say she would vote against the motion.
Upper house MP Renee Heath was also removed as party secretary
Rowville MP Kim Wells said the looming defamation action would make Ms Deeming's expulsion more difficult and said the future of Mr Pesutto's leadership was an internal matter.
Opposition tourism, sport and events spokesman Sam Groth said Friday's special meeting needed to be a "line in the sand" for the party ahead of the May 23 state budget.
"We need to start talking about things that are important to Victorians and stop talking about ourselves," he said.
"It's time for us to start presenting ourselves as an option for the people of Victoria, and that starts by listening and stop worrying about our own internal matters."
Shadow Treasurer Brad Rowswell, who said he would vote for the motion, echoed that sentiment and backed Mr Pesutto to survive as leader despite the inner turmoil.
"I'm hoping to get out of the way today whatever we need to ... and refocus on the things that actually matter to Victorians," he said.
Ms Deeming last week demanded the Victorian Liberal leader agree to issue a media statement exonerating her of being a Nazi or Nazi sympathiser or face legal action.
She appeared to back down from the ultimatum on Saturday, saying she never considered suing the Liberal Party and instead contemplated legal mediation as a way to settle on the conditions of her suspension.
It is the second time the Liberal party room has considered expelling Ms Deeming after she attended an anti-transgender rights rally earlier this year in Melbourne where neo-Nazis performed the "heil Hitler" salute.
A compromise was struck when the first Mr Pesutto-led motion, supported by a 15-page dossier accusing the MP of protesting alongside people who were "known to be publicly associated with far right-wing extremist groups including neo-Nazi activists", failed to garner enough support.
The upper house MP will remain on the crossbench as an independent.
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