A state Liberal leader is refusing to countenance the prospect of a byelection as his predecessor faces a hefty legal costs bill.

Former Victorian opposition leader John Pesutto has been ordered to pay $2.3 million in costs after he was found to have defamed first-term MP Moira Deeming.

Federal Court registrar Alison Legge made the cost ruling on Friday after the pair’s legal team argued about Deeming seeking to pay back a loan to NSW property developer Hilton Grugeon.

“I have determined that monies gifted or lent to Ms Deeming to assist her to meet her legal costs of the proceeding are not relevant to my determination and neither displace nor offset the quantum of her entitlement to costs,” Legge said.

In December, Federal Court Justice David O’Callaghan found Pesutto had defamed Deeming by implying she was associated with neo-Nazis who gatecrashed a controversial Melbourne rally she attended.

He ordered Pesutto pay her $315,000 on top of her legal costs for the case, which Legge calculated to be $2,308,873.11.

Deeming’s barrister Sue Chrysanthou SC is also pushing for Pesutto to pay her legal fees for the costs hearings.

The scale of the final bill has raised internal fears about the Hawthorn MP’s ability to pay it. People who have declared bankruptcy are ineligible to sit in the Victorian parliament.

Pesutto’s latest register of interest lists no investment properties or any other forms of income, only his home in Camberwell.

Former Victorian Liberal premiers Ted Baillieu, Jeff Kennett and Denis Napthine were listed among his donors for the court battle.

Pesutto’s annual salary has also dropped from about $378,000 to $205,000 since he lost the Liberal leadership in late December.

His barrister Daryl Williams KC sought a short stay on his client paying the lump sum to allow him to consider seeking a review of the decision, but Chrysanthou opposed the move.

In a short statement, Pesutto said he was determined to continue serving as an MP.

“I am grateful for the support I am receiving from the community and am hopeful with this support that I will be able to fulfil these obligations and continue serving the people of Victoria,” he said.

The Herald Sun reports Pesutto has been in discussions with the Cormack Foundation, a multimillion-dollar investment group for the Liberal Party, to cover the legal costs bill.

Current state Opposition Leader Brad Battin said it was up to the party secretariat to decide whether to bail out Pesutto and indicated the Liberals weren’t preparing for a byelection in Hawthorn, declaring it a “hypothetical”.

“It’s a bit early to pre-empt this,” he said.

“All of the conversations I’ll have with my team around this will remain confidential.

“I would like to see John at the next election.”

Pesutto reclaimed Hawthorn in Melbourne’s inner-east on a slender margin of 1544 votes, or 1.7 per cent, in 2022 after being unseated four years earlier.

The state seat takes in parts of the federal electorate of Kooyong, held by teal independent Monique Ryan.

After winning the defamation trial, Deeming was welcomed back into the Liberal party room and later made Battin’s “representative to the western suburbs”.

-AAP