Former Liberal leader Lord Steel has told ITV News the party is in an "awful mess" over the Rennard row and it needs "to get a grip" of it.
Lord Rennard has threatened to take legal action after being suspended for refusing to apologise over sexual harassment allegations.
Nobody thinks Nick is the kind of guy who would defend a 'boy's club', but that does not necessarily mean he has handled the issue well.
Liberal Democrat peer Lord Rennard has given his party until Thursday to lift his suspension or face legal action at the High Court in a legal letter issued at the party's headquarters.
Former Lib Dem chief executive was suspended on January 20 after failing to apologise to a number of women who had made sexual harassment complaints against him despite Nick Clegg telling him: "No apology, no whip".
Rennard's letter is understood to name individuals involved in the suspension decision, including the chairman of the Lib Dem regional parties committee Mike Wheatley and the chairman of the English Council of Lib Dems Peter Ellis.
A party spokesman said: "We have received a legal letter last Thursday. It does not constitute serving legal papers."
Miriam Clegg has described claims in the Daily Telegraph that she influenced her husband's response to the row with Lord Rennard as a "complete fabrication".
The newspaper claimed the 45-year-old was "furious" at Lord Rennard's refusal to apologise to the woman who accused him of sexual harassment, and had "shaped" Nick Clegg's response to the row.
Earlier, Nick Clegg angrily denied suggestions his wife was responsible for his tough stance on the issue, saying it was "just not on" for the media to involve his family in the dispute.
"It's total garbage, it is a complete work of fiction. Look, you can make up stuff about me, as indeed people do day in day out, have a go at me, but just don't drag Miriam into it, don't drag politicians' families into it. That's just not on," the Liberal Democrat leader said.
Nick Clegg has insisted he will not back down over his demands for Lord Rennard to apologise to four women who made allegations about the former chief executive's behaviour.
Lord Rennard has threatened to take legal action after he was suspended for refusing to apologise, sparking fears that the party could be torn apart by the row.
Speaking during his weekly phone-in on LBC radio, the Liberal Democrat leader stressed that the conclusions of an independent report into the situation had to be enforced.
"Just imagine if Alistair Webster (QC) had recommended that an apology should be issued and I came out and said 'Thank you very much, we will file away the report, and by the way, none of the recommendations need to be accepted or adhered to'. There would have quite rightly been outrage."
Mr Clegg said Lord Rennard was not acting in his own best interests in refusing to say sorry, arguing it was the "human thing" to do even where distress had been caused "inadvertently".
Alison Smith, one of the women who made allegations against Lord Rennard, has said she would be happy for a report carried out by Alistair Webster QC into the claims to be published.
She told BBC Radio 4's Today programme: "As far as I understood, Lord Rennard has seen what I said. I haven't seen the final report either and I would like to as much as the next person."
Asked if it should be published, she replied: "Yes, actually I do, but actually I've appealed on the grounds that too much emphasis was placed on intent. I think the crux of the matter was whether he brought the party into disrepute, not whether he intended to behave as he did."
Lord Rennard has denied the allegations and has said he will not apologise to the women who complained about him.
A senior Lib Dem source has said that "obviously we disagree" with Lord Steel and that reinstating Lord Rennard "is not going to sort it out".
The former Liberal leader had told ITV News the party should lift the suspension on the former chief executive, who is accused of bringing the party into disrepute by refusing to apologise to women who complained about him.
The former Liberal leader Lord Steel has told ITV News the Liberal Democrat party has got itself in an "awful mess" over the Lord Rennard saga.
He said: "The first rule in politics is when you're in a hole, stop digging and the fact is they have been digging on both sides for the past two days."
Nick Clegg has just left "The Grey Room" on committee corridor where he's been meeting Lib Dem MPs & Lords about #Rennard fiasco
Clegg told his MPs the he stood by his decision to back the report which found #Rennard accusers were "credible" & demanded he apologise
Clegg thanks his MPs for their "measured tone" over #Rennard fiasco: "It's very difficult to confront the past and pursue a new culture"
The former Liberal leader Lord Steel has told ITV News that the party should lift the threat of expulsion hanging over Lord Rennard and the peer should withdraw any legal action.
He says the party leadership need to "get to grips" with the situation.
The former Liberal leader Lord Steel has called on the party to lift the threat of expulsion hanging over Lord Rennard.
He said the party had become obsessed with the allegations against its former chief executive, which was "very, very damaging".
He also appealed to Lord Rennard to drop his threat of legal action over a fresh inquiry into claims he'd brought the party into disrepute.