A Russian court on Wednesday upheld a five-year suspended sentence for opposition leader Alexei Navalny for embezzlement that could block his bid to stand for president in 2018.
The regional court in the city of Kirov threw out an appeal and upheld suspended sentences for Navalny and his co-defendant in a case over a timber deal, RIA Novosti news agency reported.
Navalny in December announced his plan to stand for the Kremlin in 2018 as Vladimir Putin is expected to run for a fourth term.
Navalny's profile has since grown as a report by his team into alleged corruption by Prime Minister Dmitry Medvedev sparked street protests after being viewed more than 20 million times on YouTube.
In March, Navalny's supporters held the largest unauthorised demonstration in Moscow in recent years with police detaining around 1,000 people.
The internet-savvy 40-year-old lawyer first became popular speaking at mass protests against Putin's return to the Kremlin in 2012.
He has since faced a number of legal challenges that he describes as politically motivated including the Kirov case over a 2009 deal when he was an advisor to the region's governor.
Navalny is already opening campaign offices across Russia and needs to gather 300,000 signatures to register as a candidate.
A conviction for a serious crime could prevent him from standing, however.
But his campaign chief Leonid Volkov insisted the ruling would not stop Navalny's presidential bid.
"We are holding a campaign to get Alexei Navalny registered as a presidential campaign and we will achieve that," he wrote on Twitter.
"Navalny has the right to stand for election," he wrote, but acknowledged: "It won't be easy to fulfil that right."
Navalny himself confirmed on Twitter he believes he has a constitutional right to stand.
He has argued he is eligible because he is not imprisoned. But some legal experts have questioned this.
Last month attackers threw green dye at Navalny causing a chemical burn to his eye. He said Tuesday he currently has only 20 percent vision in the eye and risks losing the use of it. He did not attend court on Wednesday.
Navalny's Kirov case underwent a retrial this year after the European Court of Human Rights threw out the original verdict saying the trial was not fair, only for the court to issue exactly the same verdict again.
Navalny's lawyer Vadim Kobzev told Interfax news agency that the defence team would submit a fresh complaint to Strasbourg. He told the Kirov court the trial had ignored the "political nature of (Navalny's) prosecution."