A woman who says she was harassed by Lord Rennard has refused to rule out taking legal action against the peer.
Bridget Harris, who worked as an adviser to the Deputy Prime Minister Nick Clegg before quitting the party, told BBC Radio 4's The World Tonight programme that she would not rule out future legal action, and said she was “taking the process one step at a time”.
"In terms of civil action”, she said, “how can I possibly say that I, what I would or wouldn't do, depending on the circumstances?"
Lord Rennard was suspended by the Lib Dems after he refused to apologise over the harassment claims. The former Lib Dem chief executive has said he would not say sorry for something he had not done as it could leave him "defenceless" in any future civil action.
He is now thought to be considering whether to mount a legal challenge to the decision to strip him of the party whip in the House of Lords.
Nick Clegg puts Lib Dem authority on the line, demanding Lord Rennard apology over 'sexual harassment' he never admitted
His refusal to back down came after Mr Clegg told him he would not be allowed to sit on the Liberal Democrat benches unless he apologised. Minutes before the Lords was due to hold its first session, it was announced Lord Rennard was being suspended from the party and would face a fresh disciplinary investigation for bringing the party into disrepute by refusing to apologise.
Meanwhile, Lib Dem peer Lord Greaves said the situation was a "nightmare" and called for a South African-style "reconciliation and mediation" system to bring both sides together.
He told BBC 2's Newsnight: "We're being told that Lord Rennard may be taking legal action, Bridget Harris says she may be taking legal action. This is a nightmare."
"It's doing a lot of damage and it is getting worse by the day.
"The real problem is that the leadership of the party, broadly defined, not just Nick Clegg, have taken action which actually has rebounded and made matters worse."
Lord Rennard said he was "enormously distressed" by the situation and claimed there was a "lynch mob mentality" from some in the party in a statement released on Monday.
Claims made within the party about him during the general election had led to him considering "self harm", his 2,600 word statement revealed.
"Courtesy has always been an essential part of my moral compass”, he said.
"If ever I have hurt, embarrassed or upset anyone, then it would never have been my intention and, of course, I regret that they may have felt any hurt, embarrassment or upset. But for the reasons given, I will not offer an apology to the four women complainants. I do not believe that people should be forced to say what they know they should not say, or do not mean."
A spokesman for Lord Rennard described the committee's decision as "extraordinary" and said the peer was "taking legal advice with a view to civil action against the party".
"He does not wish to see legal action between fellow Liberal Democrats, but his membership of the party matters more to him than anything apart from family and friends," the spokesman added. "Indeed he feels that the party is also his family.
"He believes that the suspension of his membership announced this morning should be lifted, that the party should now give him the report to which he is entitled and that Liberal Democrats should act in the best spirits of the party that he joined as a teenager.
Additional reporting by Press Association