An appeals court Friday reinstated a tax fraud indictment against Gov. Jim Guy Tucker and disqualified a federal judge from hearing the case who was a friend of Hillary Rodham Clinton.

A three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis said U.S. District Judge Henry Woods lacked the power to limit Independent Counsel Kenneth Starr's jurisdiction.It also said the judge's links to President and Hillary Rodham Clinton could give the appearance of a conflict of interest and directed Chief Judge Stephen M. Reasoner to assign a different jurist to the case.

Tucker's attorneys said they would ask the 11 judges of the 8th Circuit to rehear the case. Failing that, they said, the governor would ask the U.S. Supreme Court to take up the case.

The governor, who took office when Clinton was elected president, is already on trial for an unrelated charge stemming from the Whitewater investigation.

The panel said it granted Starr's request to replace Woods to avoid the appearance of impropriety, "not because we believe Judge Woods would not handle the case in a fair and impartial manner."

Tucker was charged June 7 with lying about how he would spend a $300,000 federally backed loan and with trying to hide the value of a cable television company to avoid paying taxes on its sale.