Twenty-eight MPs met for just over an hour on Friday morning to thrash out a motion calling for Mrs Deeming's re-entry to the Liberals' caucus after Mr Pesutto was found by a court to have defamed her.
She was expelled from the parliamentary party after a controversial rally she attended in March 2023 was gatecrashed by neo-Nazis.
The vote on Friday was tied 14-all with Mr Pesutto using his casting vote to decide Mrs Deeming's fate - she stays expelled.
"This concludes the matter," he told reporters.
John Pesutto said there would be no consequences for members who vote to allow Mrs Deeming's return. (Joel Carrett/AAP PHOTOS)
Mr Pesutto said technically his casting vote was not needed because the motion required an absolute majority of 16 members under the party's constitution.
Two Liberal MPs, Cindy McLeish and Nick McGowan, were absent.
Mr Pesutto and his allies appeared downcast when leaving the meeting, but he denied being shocked at the closeness of the result and claims it was a "slap in the face" to his leadership.
"This was a party room meeting that addressed the circumstances ultimately of March of last year," he said.
"There were always a diverse range of views and that was well known.
"Today was always foreshadowed that we would ultimately revisit the question. It's been revisited and today marks a bookend to this discussion."
The motion was signed by Benambra MP Bill Tilley, opposition emergency services spokesman Richard Riordan and first-term backbenchers Renee Heath, Joe McCracken and Chris Crewther.
The rebel group said they wanted to give their colleagues a chance to "do the right thing" after the Federal Court found Mr Pesutto defamed Mrs Deeming and ordered he pay $315,632 in damages.
Upper house MP Bev McArthur said Justice David O'Callaghan had done everything but demand Mrs Deeming's re-entry into the party room, declaring she was ejected based on a "lie".
"That was our job today and we failed," she said.
"It was a glorious opportunity to fix the situation, the terrible wrong that was done in May 2023."
She said the leadership team did not offer any concessions to Mrs Deeming or her supporters during the debate.
Shadow cabinet secretary Ann-Marie Hermans, who also backed the motion, said the draw meant the issue was not resolved.
"Internally we will have a lot more work to do," she said.
Mr Riordan agreed the matter had not been resolved.
"Our party room is split down the middle," he said.
Mr Crewther said it was a very disappointing outcome and "it may be difficult to unite" the party.
Mr Pesutto was found to have made defamatory comments implying Mrs Deeming was associated with Nazis, in media interviews and a party expulsion motion following the 2023 Melbourne rally she attended.
She was initially handed a nine-month suspension before being booted from the parliamentary party after threatening to sue Mr Pesutto.
Tennis player turned Liberal MP Sam Groth quit the shadow cabinet after the defamation ruling. (Joel Carrett/AAP PHOTOS)
The opposition leader has refused to resign following the Federal Court decision, triggering former tennis player turned Nepean MP Sam Groth to quit his shadow cabinet.
Mr Pesutto flagged a shadow cabinet reshuffle was imminent but refused to say whether backers of the motion would be left out.
He was ordered to pay Mrs Deeming's yet-to-be-determined legal costs on Thursday and has confirmed he will not appeal the judgment despite suggesting there were "potential grounds" to do so.
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