A defiant Don Nardella is refusing to pay back more than $110,000 he claimed for living at Ocean Grove rather than his Melton electorate, despite calls from Premier Daniel Andrews to reimburse taxpayers.

Mr Nardella on Tuesday told Melton local newspaper Star Weekly that he would not pay the money back or apologise because it would imply that he had acted illegally or rorted the system.

The veteran Labor MP also revealed that he would not contest Melton – held by Labor by 11.2 per cent – at the 2018 poll, citing the recent controversy around his claim contributing to his decision.

"I think it's probably time that Melton had somebody new," he said. "But the difficult time that I've had has influenced that decision.