Former opposition leader John Pesutto and his supporters are quietly exploring whether he can refinance his $1.55 million loan to stop the long-running saga dragging the Liberal Party through a Supreme Court trial in an election year.

The possibility has not progressed to any specific proposal but has been loosely discussed outside mediation, The Age confirmed with four party sources unable to speak publicly.

The Hawthorn MP narrowly avoided bankruptcy – which would have forced him out of parliament and triggered a byelection in his marginal seat – after the Federal Court found he repeatedly defamed his colleague Moira Deeming and ordered he pay $2.3 million of her legal costs .

Pesutto crowdsourced about one-third of the bill, having already paid $315,000 in damages. To meet th

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