Embattled Sen. Larry Craig (R-Idaho) said Wednesday that his stated intent to resign later this month is conditional and that he will only proceed if he fails to have his guilty plea in a Minnesota court rescinded.

Although it is a long shot, Craig has hired a high-powered legal team to try to reverse his plea before the end of the month. Craig tried unsuccessfully on Wednesday to forestall a GOP leadership request to have the Ethics Committee investigate his arrest in a Minnesota airport and subsequent guilty plea, the first of what likely will be many moves in a pricey legal chess match involving all three branches of government.

“It’s an admittedly uphill battle,” Craig spokesman Dan Whiting said of his boss’s chances of serving out the remainder of his Senate term. “But a small door has been left ajar that this could be cleared up in the next three and a half weeks.”

In the unlikely event that Craig does finish his third term, Whiting said Craig would not run for re-election in 2008, leaving an open Senate seat in a solid Republican state that the GOP should have no trouble retaining.

Senate Minority Leader Mitch McConnell (Ky.), who stated during a news conference Wednesday that Craig assured him he would resign if he cannot clear up his legal situation by month’s end, and that he would prefer Craig resign regardless.

“My view remains what I said last Saturday. I thought he made the correct decision — the difficult but correct decision to resign,” McConnell said. “That would still be my view today.”

Rep. Mike Simpson (R-Idaho) said reaction in Idaho is mixed to Craig’s possible attempt to avoid resigning. Asked if Craig should stick to his plans to resign, Simpson said: “I’d like to see how it plays out over the next couple of weeks, and I’m sure he does, too.”

Simpson added that he would not seek to be appointed to the Senate if Craig ultimately resigns.

Five days after news of his arrest was first published by Roll Call, Craig said Saturday that he planned to step down at the end of September. But at the same time, he began hinting privately that his pending retirement was not necessarily a foregone conclusion, depending on what his team of lawyers can accomplish in the court system and with Senate investigators.

This week, a voice mail message surfaced in which Craig appeared to be hedging on his stated intent to resign, admitting in the message that his strategy was to clear up his legal situation in Minnesota in advance of the resignation deadline and remain in the Senate.

The Senate Ethics panel on Wednesday rejected a request by Craig lawyer Stanley Brand to scuttle further scrutiny into his arrest in a Minnesota airport bathroom earlier this summer. Craig, a married father of three, was picked up on the lewd conduct charge in June after displaying an elaborate set of foot and hand signals the arresting officer said are commonly used to proposition potential suitors. In August, Craig pleaded guilty to a lesser charge, disorderly conduct, hoping the issue would, as he said, “go away.”

“The Senate, in 220 years of recorded history, has never disciplined for misdemeanor conduct unrelated to their official duties,” Brand told Roll Call on Wednesday. “And they shouldn’t start now.”

But in a letter released late Wednesday, Senate investigators balked at Brand’s argument that the matter was outside of their purview. The rejection letter, signed by acting Senate Ethics Chairwoman Barbara Boxer (D-Calif.) and Vice Chairman John Cornyn (R-Texas), said the committee may “discipline a Member for any misconduct.”

While perhaps a moral setback for Craig, the panel’s decision to continue with the case also signals that the three-term Senator could face substantial obstacles outside of determining what may or may not have happened in the Minneapolis-St. Paul International Airport bathroom stall. Merits of the case aside, many experts claim Craig’s mission to clear his name will requiring teams of expensive lawyers exploring many yet-uncharted areas of the law.

To pay his bills, campaign finance experts say the beleaguered Senator may try to dip into his campaign account, which has about $550,000 on hand. Many House Members continue to look to political donors to pay down massive legal fees to beat back everything from corruption allegations to possible inappropriate contact with minors. In nearly every case, the Federal Election Commission and House and Senate ethics panels have agreed the costs are related to a Members “official duties” — an apparent term of art even lawyers quibble over.

Jan Baran, a Republican campaign finance lawyer, said Members almost always use campaign funds to pay legal fees charged up while beating back an ethics complaint and when fighting campaign finance lawsuits. But outside of those two clear-cut areas, the legal waters get murky.

“You can’t use your campaign funds to pay your lawyer to file a divorce,” Baran said. “The question becomes can you use your campaign funds to overturn your guilty plea in a misdemeanor disorderly conduct civil action in Minnesota, personal behavior? Believe me, no one’s asked this question before.”

The FEC, which usually signs off on requests to use campaign funds to pay for legal fees, has stated in similar cases that campaign funds may be used for legal fees and other ”ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office.”

Unlike the FEC, Members must receive approval from the Senate Ethics panel before using campaign funds to pay legal fees when a Senate investigation is under way. Craig’s office declined Wednesday to confirm the lawmaker has sought permission from either the FEC or the ethics panel to use his campaign funds.

Cleta Mitchell, a Republican campaign finance lawyer, said the Ethics Committee has been swift and fierce in policing Members use of donor funds.

“You can’t even really talk about using those funds until you have Ethics Committee approval,” Mitchell said.

Brand, Craig’s lawyer, said the FEC’s rules were purposely written to be vague, drafted to “provide broad latitude to Members arising from their status as Members and their status as candidates in a very generous way.”

“No agency or committee has ever looked behind a Member defending himself, with respect to his status as a member or candidate, with those funds,” Brand said. “But for the fact that they were elected, they wouldn’t be in that situation.”

Many legal experts also said Craig may choose to set up a legal defense fund to pay his bills. Lawrence Norton, an election law lawyer and former top lawyer at the FEC, said that should Craig decide to establish a separate account solely to accept gifts for his legal fees, yet another set of rules apply.

“Senate rules prohibit contributions from lobbyists, foreign nationals, corporations, unions, and any member’s principal campaign committee,” Norton explained in an e-mail Wednesday. “The fund must be approved by the Senate’s ethics committee, and there must be a trustee to manage the account.”

He continued: “All funds must be used to pay only for investigative, civil, criminal, and other legal proceedings relating to an officeholder’s election to office, official duties while in office, and administrative or fundraising expenses of the trust. [Senate] contributions are limited to $10,000 from any single source.”

Michael Toner, a Republican campaign finance lawyer and former FEC chairman, agreed the panel would approve a request by Craig “to pay for any legal expenses he may incur or have incurred in the state of Minnesota or if he chooses to fight the charges before the Senate Ethics Committee.”

Regardless of how Craig decides to proceed — and who’s allowed to pay the bill — experts agree the price tag will be hefty for a lawmaker who is worth at the most $750,000.

“If he is successful in having the guilty plea overturned, he then goes to trial — it doesn’t mean he’s acquitted, it just means he’s not guilty,” Baran said. “If you have a lawyer that charges $400-$500 per hour, it adds up in a hurry.”

Erin P. Billings and Steven T. Dennis contributed to this report.