Victorian Opposition Leader Daniel Andrews has shied away from triggering the immediate downfall of the Napthine government by instead pushing to have rogue MP Geoff Shaw expelled from Parliament.

Mr Andrews told reporters on Wednesday morning that he would move a motion to have the Frankston MP found in contempt of Parliament and expelled.

"Geoff Shaw is a rorter. Geoff Shaw has no place in the Victorian Parliament," he said.

On Tuesday, former Speaker Ken Smith said he would support Labor in the push to have Mr Shaw found in contempt for misusing his taxpayer-funded car.

Mr Shaw, who holds the balance of power in Victoria's Parliament, then unleashed a political whirlwind by declaring late on Tuesday that he was prepared to support a no-confidence motion against the Premier and government.

In response, the Premier said he would not be held to ransom by Mr Shaw, while Mr Andrews said he would not do any deals with the independent MP.

Mr Andrews said on Wednesday that Mr Shaw had been allowed to run the government.

"We will move to expel Geoff Shaw from the Parliament of Victoria. That's what I believe is the most appropriate thing to do," he said.

Mr Andrews said a byelection for Mr Shaw's Frankston seat could be held as early as July 12 or 19.

If a byelection was held in Frankston in July, voters would have to return to the polls just months later for the state election in November. Mr Andrews said a byelection for Mr Shaw's seat would not be a waste of taxpayer money.

"The people of Frankston can do better than him," he said.

Dr Napthine said on Wednesday morning that Mr Shaw would be punished but that it must be done appropriately and to ensure that it cannot be challenged in court.

Speaking at Wedderburn College in central Victoria, the Premier vowed to punish Mr Shaw, and said he would be held to account.

“Geoff Shaw has done the wrong thing," Dr Napthine said. “Geoff Shaw must be held fully accountable for his wrongful actions, he must be made to pay the price and [we] will ensure he pays the price."

Dr Napthine said the government did not want to rush into something that could be challenged in court, so it was seeking legal advice. He would not answer questions on a possible byelection if Mr Shaw was expelled.

“We don't want to rush into something that may potentially go to the high court and [see] Geoff Shaw walk away without paying account for his actions.”

Dr Napthine, who had earlier refused an offer to meet Mr Andrews to discuss the crisis, said it would have been inappropriate to involve Governor Alex Chernov in the political matter.

“The Governor must be, in the Westminister system, independent and above day-to-day politics," Dr Napthine said.

He said he would not allow Mr Shaw to introduce abortion reforms and also described the MP's demands for a judicial appointment as "ludicrous".

"I'm saying to the Labor party that their track record in recent times has been a track record on a misunderstanding of the constitution, misunderstanding of the Governor's role, based on wanting to be a wrecker, rather than a builder," Dr Napthine said.

"What they are seeking to do is score cheap political points."

Mr Shaw is expected to make a statement some time on Wednesday, according to his spokesman.

Premier Denis Napthine will continue to tour the Bendigo region, where he will make further local announcements.

Former Speaker Ken Smith would not comment on the saga on Wednesday. On Tuesday, a defiant Mr Smith vowed he would continue to support a Labor proposal to find Mr Shaw in contempt of Parliament for misusing his taxpayer-funded car.

Mr Andrews has said that Labor would allow the state budget to be passed so that public servants could be paid and schools and hospitals receive their funding. "Labor will pass the budget because that's the right thing to do."

Prime Minister Tony Abbott dismissed suggestions an early election may be needed to resolve the political impasse in Victoria and urged the Napthine government to get on with the job of governing.

Mr Abbott said he had not spoken to Dr Napthine following Tuesday's political drama but said while Victorian Labor had gotten “extremely excited” over the “maverick” Mr Shaw's comments in a radio interview, the state already had a government.

“They have just brought down an extremely well-received budget. That budget should go through the Parliament in this coming week and the government should just get on with governing," he said.

“It's a good government, it's doing a good job, it's getting on with building a strong economic future, it's getting on with building the infrastructure of the future and that's what should happen. It should be allowed to get on with its job.”

Mr Shaw made a number of "ludicrous demands", the Premier revealed last night.

These included that the Premier provide an "absolute assurance" that Parliament would not sanction the MP further in relation to the misuse of his taxpayer-funded car.

Mr Shaw also asked the Premier to make a particular judicial appointment.

A spokesman for the Opposition Leader said Mr Andrews would be spending the rest of the day in media interviews and meetings. The spokesman would not say who he was meeting.

With Henrietta Cook and James Massola