A motion of no confidence has been tabled in Fine Gael TD Maria Bailey in her own constituency.
Senior figures in the party have proposed a motion of no confidence in the Blackrock district of Fine Gael, a unit of the Dún Laoghaire organisation, where Ms Bailey is a candidate is the forthcoming election.
It is believed that senior figures say her compensation case will cause further damage the organisation.
She was demoted by the Taoiseach Leo Varadkar after an internal review found she overstated the impact of injuries she suffered after falling off a swing in the Dean Hotel in Dublin.
In July, Mr Varadkar explained: “Deputy Bailey signed an affidavit (linked to a personal injuries summons) that over-stated the impact of her injuries on her running.
"The inquiry concludes that it is unlikely that a court would conclude that she deliberately sought to mislead as other legal documents talk about her running being restricted rather than not being able to run at all.
“There have been inconsistencies in Deputy Bailey’s account of events to me and the media that I cannot reconcile."
The no confidence motion in Ms Bailey was put forward at a meeting on Thursday night.
It has been deferred to a later date and could see her removed as a Fine Gael candidate.
Some people in Dún Laoghaire have mixed views about the motion.
One man suggested to Newstalk: "I think she should resign - as a voter I used to vote for Fine Gael. After this scandal, no - she should give up".
Another said: "I think she should stay on and see if she still gets the votes, she still has the support".
"If she's good at what she does then she'll prosper - and if not, then she'll fail and that'll be it"
And another man added: "When you look at them overall over the years, there's a lot worse things happened with politicians and they're all still there".