Julian Assange, founder of WikiLeaks speaks to the media and members of the public from a balcony at the Ecuadorian Embassy in London on Dec. 20, 2012. (Photo: AP)
WikiLeaks founder Julian Assange on Thursday lost his appeal against a Swedish arrest warrant over alleged sex crimes, the latest setback in a four-year legal battle.
The 43-year-old Australian has been holed up in Ecuador's embassy in London for two years to avoid extradition to Sweden.
Swedish prosecutors want to question him about accusations of rape and sexual molestation brought against him by two women in their 30s when he visited the country in 2010.
He denies the allegations, and his supporters claim the case is politically-motivated.
The Swedish Court of Appeal said it rejected Assange's appeal for a detention order issued by a Stockholm city court to be revoked.
"In making this assessment, account must be taken of the fact that Julian Assange is suspected of crimes of a relatively serious nature," the court ruling said.
"Moreover, there is a great risk that he will flee and thereby evade legal proceedings if the detention order is set aside."
Assange's lawyer said he would appeal to the Swedish Supreme Court.
The Australian was ordered "detained in absence" by a Swedish district court in 2010 and a previous application to drop the arrest warrant was dismissed in July.
A European arrest warrant has also been issued to support the Swedish move and British police have been on guard outside the Ecuador embassy in London to arrest him should he step outside.
In August, Assange said he would leave "soon", amid reports that he was suffering from a heart condition and other ailments.
Assange had called on Swedish prosecutors to travel to London to question him or, alternatively, to do so by video link.
The court said Thursday that prosecutors believed "interviews must take place here in Sweden in view of the nature of the crimes... and the fact that a possible trial requires him to be in Sweden," dismissing Assange's claim that he is effectively under house arrest.
"The fact is that Julian Assange can leave the embassy if he so wishes. This fact means that the restriction of his freedom cannot be equated with a deprivation of liberty."
Assange fears extradition to Sweden could lead to him being transferred to the United States to face trial over WikiLeaks' publication of vast amounts of classified US military and diplomatic documents.
"We're sure the law is on our side and it's just a question of time before the Swedish legal system has to throw in the towel," his lawyer Per Samuelsson told AFP.
"You cannot require him to leave the embassy at the cost of giving up political asylum, running the risk of winding up in jail in the United States," he said, adding that Assange planned to appeal.
"The whole case in Sweden is extremely politicised."
In 2010, WikiLeaks began publishing 250,000 American diplomatic cables and 500,000 classified military reports, covering both American diplomacy and the US wars in Iraq and Afghanistan.
In August of that year, Assange travelled to Stockholm amid rumours that he considered moving the WikiLeaks servers to the country.
Since then his supporters have claimed that the case was politically motivated and that Sweden would bow to US pressure, citing earlier cases of renditions of suspected terrorists following the 9/11 attacks.
Swedish prosecutors have replied that the idea was "far-fetched" and that no arrest warrant for Assange has been issued by US authorities.