It emerged last week that Moira Deeming had filed a police report claiming she was assaulted by Matthew Guy at a gala dinner on May 23.Â
Mrs Deeming accused her colleague of grabbing her "violently" in a headlock, but since claimed she misunderstood the meaning of headlock.
Victoria Police on Thursday said "there was no offence detected" after reviewing CCTV footage of the incident.
Shadow attorney-general James Newbury said a decision on Mrs Deeming's future in the Liberal Party was imminent.
"A request was made for her to make an unqualified apology. She has refused to do that," Mr Newbury told reporters on Tuesday.
"Further action, therefore, needs to occur, and the party is working on that now."
He said given Mrs Deeming's clarification around the language used in her complaint, an apology wasn't too much to ask.
"I think any good person would have apologised," he said.
"Matt has gone through a very, very difficult few days, and the right thing would have been for an apology, an unconditional apology."
In a statement, released on behalf of Mrs Deeming by her lawyer Tim Houweling, she said her complaint was made "honestly, in good faith and only as a matter of last resort".
Mr Houweling referred to CCTV footage which shows Mr Guy sitting at a table and talking with Mrs Deeming and another man.
The former leader appears to place his hand on Mrs Deeming's upper back or shoulder area and pull her in to say something before doing a similar gesture with the man.
The lawyer said Mr Guy had maintained a grip as Mrs Deeming attempted to pull away, preventing her from freely moving her head for several seconds.
"Without attributing motive to the other party, our client maintains that from her perspective this physical contact by a senior male colleague in the workplace was unexpected, unwelcome, physically painful and caused her to feel fear and confusion," he said.
Mr Guy had demanded a public apology from Mrs Deeming and said his family name and reputation was "not a political toy".
"There was no ambiguity. I did not do what was alleged. The CCTV proves this. It did from the start, and Victoria Police agree," he told reporters on Friday.
"Moira Deeming owes me a public apology."
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