Geoff Shaw after an earlier court appearance. Credit:Jason South ‘‘The DPP has determined (in accordance with the criteria in his Policy relating to prosecutorial discretion, available on the OPP website) that there is not a reasonable prospect of criminal conviction in this matter,’’ Mr Champion said. He said the decision was made after the magistrate determined that the matter was unsuitable for diversion and Mr Shaw’s counsel indicated that the balance-of-power MP would plead not guilty to the reinstated charges. Mr Champion said it would be inappropriate to comment further because the matter had been referred to parliament’s privileges committee. The secretive parliamentary committee had previously suspended its investigation into Mr Shaw while the matter was before court.

"As the matters alleged against Mr Shaw have been referred to the Parliamentary Privileges Committee, it is not appropriate for the Director to comment further," Mr Champion said. Mr Shaw's solicitor, Quinn McCormack, said she welcomed the development. The withdrawal of the charges will come as a major relief for the state government, given Premier Denis Napthine relies on Mr Shaw’s vote to govern. Had Mr Shaw been found guilty and convicted of the charges he would not have been able to hold his seat in Parliament, which would have forced his electorate of Frankston into a byelection. The government had feared an early byelection could have cost it power.

Mr Shaw resigned from the parliamentary Liberal Party this year to sit as an independent, citing a lack of confidence in then premier Ted Baillieu. Mr Baillieu’s subsequent resignation handed the premiership to Dr Napthine. Mr Shaw, 46, was alleged to have made purchases totalling $2096.56 on his parliamentary fuel card, and to have used his parliamentary vehicle, for his own personal use. Mr Shaw last month indicated he would plead guilty to one rolled-up charge on the expectation the matter would proceed to Melbourne Magistrates Court's diversion program, where no conviction is recorded on the proviso the offender admits wrongdoing. But that plan was thrown into a spin when Mr Rozencwajg ruled Mr Shaw was unsuitable for the diversion program.

The original charges were then reinstated and Mr Shaw’s lawyers said he would plead not guilty. Mr Shaw was scheduled to return before the court on December 18, until Mr Elston appeared before the court on Tuesday for what he called an "urgent" special mention. Mr Shaw was not in court on Tuesday morning. Outside parliament, Corrections Minister Edward O'Donohue would not say what the DPP's decision to drop the charges meant for the Napthine government, which relies on Mr Shaw's vote. "The DPP has made its decision. The DPP is independent of government and has made its decision based on the information at hand," he said.

He refused to say whether there was a sense of relief in the government now that the charges against the balance-of-power MP had been dropped. Mr O’Donohue said the privileges committee was considering the matter and it was inappropriate to comment further. Acting opposition leader James Merlino said the DPP's decision to drop the charges "stank". "Like most Victorians, I am shaking my head at this decision. I don't understand how at this late stage in the process the DPP has come to the conclusion that there is not a reasonable prospect for conviction," he said. He refused to say whether he still had confidence in the DPP.

Mr Merlino said the DPP's decision was very convenient for Geoff Shaw and Denis Napthine. "Most Victorians will think something stinks about this decision. It is hard to understand how at this late stage of the process the DPP doesn't think there is a reasonable prospect for a conviction," he said. Mr Shaw's only sanction for allegedly rorting his parliamentary car would be from a parliamentary committee stacked by his own colleagues, Mr Merlino said. With Henrietta Cook Loading

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