Moira Deeming has avoided expulsion after a motion to remove her from the Liberal party room was defeated, delivering a blow to party leader John Pesutto.

Deeming was suspended for nine months, and her membership in the parliamentary party room will be reviewed after the suspension. Opposition Leader Pesutto, who had brought the motion to remove Deeming for her participation in the Let Women Speak rally on the steps of state parliament, faced a huge loss.

He had claimed that Deeming had close associations with people who were known to be associated with “far-right wing extremists including neo-Nazi activists.” However, several MPs were "unconvinced" that Deeming’s conduct met the “threshold worthy of expulsion”.

The women's rights rally, attended by Deeming, was gatecrashed by a small group of Neo-Nazi extremists who performed the Nazi salute on the steps of parliament.

Although Deeming insisted she did nothing wrong by attending the rally, Pesutto claimed she had links to far-right extremists.

He was left red-faced after using false Wikipedia claims that alleged the protest organiser Kellie-Jay Keen had a history of association with extremist groups and had conducted video interviews with Richard Spencer, a prominent figure in the American alt-right movement, and had shared a platform with David Duke, a former leader of the Ku Klux Klan.

Despite Pesutto's claims, Deeming denied knowingly associating with Nazis, and many Liberal MPs were unconvinced that her conduct warranted expulsion from the party.

Pesutto had refused to say whether he would step down if the motion to expel Deeming failed, and now faces the prospect of welcoming back an MP whom he had tried to remove from the party.