Prime Minister Scott Morrison said he will not be heeding calls to have Katherine Deves disendorsed as the Liberal party candidate for the Sydney seat of Warringah.
The seat is currently held by independent MP Zali Stegall, who won the seat from former prime minister Tony Abbott in the 2019 election.
New South Wales Treasurer and Liberal MP Matt Kean publicly called for Ms Deves to be disendorsed, telling The Guardian and the ABC that her comments on transgender people are "horrendous".
The extent of her past remarks on members of the transgender community have been revealed this week, prompting .
In , Ms Deves called transgender people "surgically mutilated and sterilised".
She also compared her lobbying to stop transgender athletes from competing in women's sport to standing up against the Holocaust during a YouTube panel last year.
Mr Kean said he wants Ms Deves removed as a party candidate, labelling her comments "bigotry" and damaging for children.
"Coming out as trans would be hugely challenging, especially for kids, and political leaders should be condemning the persecution of people based on their gender, not participating in it."
On Saturday, Mr Morrison said he won't be bowing to pressure to have Ms Deves removed as the party candidate for Warringah.
"I think it's really important that she has withdrawn those comments, and she has acknowledged they've been insensitive," he told reporters in Melbourne.
"I think that is the right way to respect the trans community. I don't share those sentiment either."
Mr Morrison said Ms Deves has a lot to contribute and offer to the community.
"What I do know, is that in life, people learn things along the way, and as they learn things along the way, they learn how to be a better member of parliament, and that is a better more respectful way to prosecute the cases that they seek to do in public life.
"[She is] a young woman who is raising three girls with her partner, who has had to put herself through and get herself a law degree, so she can be successful; a professional woman who's standing for the Liberal party - that's something I've been trying to encourage."
Liberal moderates have been concerned Ms Deves' stance against transgender people could result in a loss of votes from the electorate.
Opposition Leader Anthony Albanese said the Liberal Party is experiencing a "civil war".
"The New South Wales branch is tearing itself apart," he told reporters on Sunday from the Queensland city of Cairns.
"This has been a civil war that has been going on for over a year now and what is extraordinary is that Katherine Deves has been handpicked by the Prime Minister.
"He is always looking to blame someone else. It is very clear that this selection of this candidate is not just dividing the country, it is dividing the Liberal Party."
