A Swedish court has upheld the detention order on Julian Assange, reaffirming the legal basis for an international warrant for the WikiLeaks founder.
The WikiLeaks founder's lawyers said they will appeal the decision made today by the Stockholm District Court.
Mr Assange took refuge in the Ecuadorian embassy in London to avoid extradition over the allegations in June 2012 and had previously said he would stay there even if the Swedish case is dropped.
He has denied claims that he sexually molested one woman in Stockholm and raped another woman in Enkoping as she slept in 2010, saying they are part of a smear campaign against him.
The Swedish court held a public hearing on Wednesday on whether to lift his arrest warrant after a legal challenge, the Guardian reported.
His lawyers, Thomas Olsson and Per Samuelson, are believed to have argued that the allegations have insufficient basis and that the European arrest warrant was disproportionate.
But Swedish prosecutors argued there are sufficient grounds to continue with the case and his lack of liberty in the Ecuadorian embassy was voluntary.
Last year, Mr Assange said he would stay there even if sex charges were dropped because he feared the US was also trying to extradite him.
He said: “The strong view of my US lawyer is that there is already a sealed indictment which means I would be arrested, unless the British Government gave information or guarantees that would grant me safe passage.
“We know there is an ongoing investigation in the US and we know I am a target of the Federal grand jury. There is a 99.97% chance that I will be indicted.
"So if the Swedish Government drops their request (to go to Sweden) tomorrow, I still cannot leave the embassy.”
A bizarre video was posted online last week of him working out inside the building with former Manchester United footballer Eric Cantona.
WikiLeaks was involved in several court cases, including the high profile trial of former US army intelligence officer Bradley Manning,
Swedish and British lawyers have criticised the refusal to question Assange in London as the deadlock continues in the case for a second year.
The hearing was due to start at noon, British Summer Time, and end at 4pm.