Opposition Leader Matthew Guy attended a lobster dinner in April where Mr Madafferi was present. Credit:AAP The slogans are a direct reference to the Coalition's tough(er)-on-crime policies and their unveiling was a starter's whistle for the 2018 election campaign. This marathon race to be Victoria's next premier is one Guy has been training to run for many years, and on Monday he looked in prime condition, the confident leader of a disciplined and united parliamentary team. So confident he even delivered a gentle backhander to in-fighting federal colleagues, warning them to "get your house in order". Just who was it who said a week is a long time in politics?

Parliament House was shaken to its foundations this week by revelations in Fairfax Media that Guy dined with alleged mafia kingpin Tony Madafferi, along with long-time Liberal supporters the Lamattina family, and that party official Barrie Macmillan later discussed dividing a large donation from dinner guests into small, non-disclosable amounts. Macmillan has since been dumped and Madafferi, who has never been charged with any crime, maintains his innocence and has threatened to sue the government. But the Lobster Cave story has been a disaster for Guy. It has derailed his unofficial election campaign launch, compromised his tough-on-crime persona, provoked questions about his grip on the leadership and exposed wider division and dysfunction within the Liberal Party. Needless to say the stories have been a gift to Labor, which has been forced into an arms race with the Liberals on law and order policy due to widespread community concern about rising crime rates. Now it has an easy retort to charges it is soft on crime. "From now on, when we say law-and-order, Labor will say 'lobster'," one Liberal said. "It's a mess." A senior MP put it like this: "If your entire line of attack is based on one policy area, you can't really afford to get caught out."

Question time played out in this fashion this week. The Liberals went in hard on crime on Tuesday and Wednesday, even bringing victims and family members of victims of crime into the gallery to observe the theatre. But the aggressive line of questioning was met each time by jibes about lobster and Grange. "Take the mob's money, eat the mob's lobster and then come in here and pretend to be a friend of victims — no credibility whatsoever," Andrews barked across the chamber on Wednesday, in one of dozens of volleys fired at the Opposition leader. By Thursday, a bruised Coalition had changed the subject to rising energy costs. Liberal MPs say Matthew Guy still has the support of his parliamentary colleagues and that there is no appetite for a spill, despite him having had his worst week as leader. "It's not the week we would have wanted but we're just getting on with it," one senior Liberal MP said on Friday, borrowing Labor's key catchphrase.

But outside parliament, in the broader party machine, Guy has enemies who are happy to see the party's crime-fighting narrative collapse if it leads to a leadership change. "The gloves are really off with Matthew," one party insider said, "but we seem to lack people with courage and conviction to do anything about it." Another senior MP characterised this discord less charitably, dismissing it as the work of outsiders pushing their own cause: "Anyone can join the party for 100 bucks and some people do and they spread a lot of havoc." Guy appeared to voice this theory when he intimated that the source of the leaked phone recording of Barrie Macmillan may have been a factional enemy eager to destroy him. "This issue we've seen in politics, not just in Australia but in other parts of the world, where people are being taped and this is being leaked ... I mean this is really dirty politics," he said this week.

Tensions have simmered within the Victorian branch for months over shifting factional allegiances. Central to this realignment is Marcus Bastiaan, the charismatic numbers man who has torn like a tornado through the party and sought to thrust it further to the right, where many of Guy's socially progressive views, in support of gay marriage for instance, are not welcomed. Aligning himself with state president Michael Kroger, who is no ally of Guy, Bastiaan and his supporters have targeted conservative churches, Probus groups, and "anyone who will listen", exposing the ambitious 27-year-old to allegations of branch stacking. Some concede that the hostilities between the parliamentary party and some members of the organisation wing are not sustainable. In a bid to refocus, Brighton candidate James Newbury – a soon-to-be member of Guy's team but also one of the Young Turks – has suggested a peace pact between the warring sides. Both are set to meet within days. "To get rid of dangerous Daniel Andrews our party needs to stop the internal squabbles. It's time to kiss and make up, and lock in behind Matthew Guy," he said.

The problem for Guy's internal enemies is there are few ready-made alternatives for a party that has invested in building him up as premier-in-waiting, nor even anyone agitating to replace him. Shadow treasurer Michael O'Brien signalled his ambition when he ran against Guy in a leadership ballot in 2014, but went on record during this week's furore to give Guy his full support. Shadow attorney-general John Pesutto and MP for Kew Tim Smith are both viewed as possible future leaders but are currently close to Guy. If Guy does survive, as his colleagues insist he will, it will not be the first time he has lived through scandal and come out intact, or even stronger, on the other side. His time as planning minister in the Baillieu/Napthine governments was marked by a number of missteps, each of which raised questions about his judgment. In 2011 he rezoned farmland on Phillip Island, only to backflip and reverse the decision days later, leading to costly out-of-court settlement. He controversially approved a slew of towering skyscrapers, including one that would overshadow the Yarra against long-standing planning rules; and gifted industrial landowners in Fishermans Bend a huge property windfall when rezoned the area and sparked a flood of tower applications without any requirement for developer contributions.

And yet, despite these decisions, he was his colleagues' clear choice as leader following the 2014 election loss. A teenaged Guy joined the Liberal Party in the dying days of the Cain Labor government and took his first full-time job in politics working for then Liberal premier Jeff Kennett, who has remained a big influence. Like Guy, Kennett was also a youthful, often abrasive leader who delighted in a scrap. He became premier at 44, the same age Guy will be when Victoria goes to polls next year. Kennett was forthright in his defence of Guy, arguing he would have done the same thing, and even suggesting Guy made no error of judgment in dining with a man police view as a senior organised crime figure. "I have known the Lamattinas for 50 years; they are a very good family," Kennett said. "If the Lamattinas had asked me as opposition leader to have sat down with them and their family I would have done it without question, and nor would I have asked them to tell me who was going to be there."

But if Guy maintains the confidence of his colleagues, the real test is what the voters make of his dinner blunder, and whether they will be swayed by an outwardly crime-fighting politician who was caught eating a $450-for-two seafood platter and sipping Grange with an alleged Mafia don. Zareh Ghazarian is lecturer in politics at Monash University, and said the dinner was potentially damaging for Guy's electoral chances, because if nothing else it fed into widespread public cynicism about politicians. Loading "Of all the places to be wining and dining, at a lobster restaurant," Dr Ghazarian said. "It adds to this sense that politicians have lost touch with the ordinary voter."