Sensing blood, the Opposition used every tactic to test the mettle of Mr Brooks and to continue to heap the pressure on Premier Daniel Andrews over the entitlements scandal, uncovered by Fairfax Media, which saw the resignation of Speaker Telmo Languiller and his deputy Mr Nardella.

A move by the Opposition to set up a parliamentary inquiry - in addition to an internal audit - into the second residence claims was blocked by Labor.

Opposition Leader Matthew Guy also called on Mr Brooks to show his independence and that he was not Mr Andrews' "captain's pick", by releasing the travel logs of his predecessor.

Mr Guy said the government's investigation of the rorting was a "sham".

"I want this matter now to be referred to Victoria Police to ascertain whether or not any matters of criminality have occurred," he said.

He said matters of enrolment and eligibility had not been cleared up.

Mr Guy also alleged in parliament that Mr Nardella may have claimed his primary residence was a caravan in an Ocean Grove caravan park.

Later Mr Guy told reporters that government MPs had advised the opposition about the caravan park claims.

Mr Guy also said he believed Mr Nardella had previously lived in Ballarat.

The embattled Mr Nardella was kicked out of the Labor Party caucus on Tuesday after he refused to pay back more than $100,000 he'd claimed to maintain a beachside residence in Ocean Grove, rather than his Melton electorate.

Mr Andrews met with the Melton MP in the morning and put it in "very clear terms" to Mr Nardella that he should resign from the parliamentary Labor Party if he was unwilling to repay the money.

"I indicated to him as I have done for some time now that in my judgment he should repay the money that he claimed," Mr Andrews said.

"He indicated to me that he was unwilling to do that and I accordingly asked him to resign from the parliamentary Labor Party and he has done that.

Mr Andrews said the way Mr Nardella voted from now on was something he no longer had control over.

"As to who he votes for, his support or otherwise, it's entirely a matter for him - only he can speak to that."

Opposition Leader Matthew Guy said: "Daniel Andrews was dragged kicking and screaming to sack his rorting MP.

"If the Premier continues to accept his tainted vote then his words today are meaningless."

Mr Nardella, who has already indicated he would resign from parliament before next year's state election, is expected to remain in the lower house as an independent.

The move will technically reduce Labor's numbers in the lower house from 47 to 46 out of 88.

That will give Labor a very narrow majority after accounting for the speaker, who only votes in situations when the parliament is deadlocked.

Special Minister of State Gavin Jennings said that "I understand he will stay in the parliament."

Mr Nardella resigned as deputy speaker in the wake of an expenses scandal which also saw the speaker, Telmo Languiller quit.

Bundoora MP Colin Brooks will be appointed as speaker to replace Mr Languiller.

He said it was a great honour to take up the role.

His deputy will be Bendigo West MP Maree Edwards.

Mr Nardella claimed a second residence allowance for living in Ocean Grove, despite his Melton electorate being located many kilometres away.

Mr Nardella did not attend caucus and is camped out in the MPs' cafe in parliament.

Two weeks ago Fairfax Media revealed that Mr Nardella, the deputy speaker, had claimed $113,000 to live in Ocean Grove, nearly 80 kilometres from his electorate.

Mr Nardella, and Mr Languiller both claimed the second residence allowance designed for country MPs who have to travel regularly to Melbourne for parliament.

The pair resigned from their posts days after the revelations, but unlike Mr Languiller, Mr Nardella is refusing to repay the money.

Mr Nardella is the first MP to quit caucus this term, but follows the resignation of three of Mr Andrews' ministers in the past two years, as well as Mr Languiller and upper house whip Cesar Melhem.