UPDATE 5-U.S. Sen. Stevens guilty of corruption charges

(Adds Reid statement, recasts)

By Randall Mikkelsen

WASHINGTON, Oct 27 (Reuters) - U.S. Sen. Ted Stevens of Alaska was convicted of corruption on Monday, a verdict that could endanger the Republican's political future and help Democrats expand control of the Senate in the Nov. 4 election.

Stevens, 84, was convicted on all seven counts of lying on Senate disclosure forms by failing to report more than $250,000 in home renovations and other gifts from an oil executive.

Stevens vowed to return to Alaska on Wednesday and resume campaigning for re-election against his Democratic challenger, Anchorage Mayor Mark Begich. "I will fight this unjust verdict with every ounce of energy I have," he said in a blistering statement issued after the verdict.

"I ask that Alaskans and my Senate colleagues stand with me as I pursue my rights. I remain a candidate for the United States Senate."

The loss of Stevens' seat could help Democrats control 60 seats in the 100-seat chamber, enough to overcome potential Republican roadblocks.

The Senate could vote to expel a convicted felon with a two-thirds vote, but no action is expected before next week's election. Since 1789, the Senate has expelled only 15 members.

Senate Majority Leader Harry Reid, a Nevada Democrat, urged Stevens to "respect the outcome of the judicial process and the dignity of the United States Senate."

Alaska Gov. Sarah Palin, the Republican vice presidential candidate who casts herself as a reformer, called the verdict a blow against corruption in Alaska.

"The verdict shines a light on the corrupting influence of the big oil-service company that was allowed to control too much of our state. That control was part of the culture of corruption I was elected to fight. And that fight must always move forward regardless of party or seniority or even past service," Palin said in a statement.

Stevens has been one of the Senate's most powerful Republicans, using his authority to steer billions of dollars of federal spending to his home state.

He is known for his proposed "Bridge to Nowhere," which became a symbol of out-of-control "pork barrel" spending. The now-abandoned project would have linked the town of Ketchikan to its island airport at a cost of $398 million.

Stevens, who had testified in his own defense, showed a fixed frown as he silently left the court. "I am innocent," he said in the statement. He accused Justice Department prosecutors of misconduct and acting in an "unconscionable manner."

LONG SENTENCE UNLIKELY

He faces up to five years in prison on each of the seven counts. Under federal sentencing guidelines he would likely receive much less prison time or only probation.