Washington ? Idaho Sen. Larry Craig lost a bid Thursday to withdraw his guilty plea in a men’s room sex sting but defiantly vowed to finish his Senate term, prolonging a headache for Republican leaders already facing a tough political climate.

Craig had announced plans to resign his seat by Sept. 30, but wavered when he went to court in hopes of withdrawing his plea. He issued a statement Thursday on staying in the Senate shortly after Idaho Gov. C.L. “Butch” Otter relayed word that he had selected a replacement for Craig in the event of a vacancy.

“I have seen that it is possible for me to work here effectively,” Craig said in a written statement that disappointed fellow Republicans who have urged him to step down. Craig, 62, said he will not seek a fourth term in November 2008.

“He is ready to act should we receive a letter of resignation,” said Jon Hanian, Otter’s spokesman.

Craig said in his statement: “I will continue my effort to clear my name in the Senate Ethics Committee – something that is not possible if I am not serving in the Senate.”

The bipartisan ethics panel has already signaled it is reviewing details of Craig’s case, a step requested by Senate Republican leaders. His decision to stay and fight raises the strong possibility of public hearings centered on the issue of gay sex.

Senate Republicans made clear they wish Craig would leave office and let them forget the episode that has fueled jokes on late-night television for weeks. Idaho is likely to remain in the GOP column after next year’s election, but Craig’s insistence on finishing his term was received frostily by colleagues.

“Senator Craig gave us his word” that he would resign by Sept. 30 if he could not overturn the guilty plea, said Sen. John Ensign, R-Nev., who chairs the GOP campaign committee overseeing next year’s Senate elections. “I wish he would stick to his word.”