UPDATE 1-Illinois official asks court to oust governor

(Adds quotes, ripple effects of legal problems)

By Andrew Stern and Michael Conlon

CHICAGO, Dec 12 (Reuters) - Illinois' top legal officer went to the state supreme court on Friday to try to get scandal-plagued Gov. Rod Blagojevich temporarily removed from office.

The unprecedented move by Attorney General Lisa Madigan came as Blagojevich showed no sign of resigning three days after his arrest on charges of swapping political favors for cash, including an attempt to sell the U.S. Senate seat Barack Obama gave up after he was elected president last month.

Blagojevich's chief of staff, John Harris, who was charged with the same offenses as Blagojevich on Tuesday, resigned on Friday.

Madigan, a Democrat like the governor and Obama, told a news conference that a provision of the state law, although never before invoked, allows her to seek the governor's removal through the court.

Madigan said she had asked the court for a temporary restraining order declaring the governor disabled and taking away most of his official powers, turning them over to the Democratic lieutenant governor.

"We recognize the court may be reluctant to take up this matter," she said, since it calls for a broad interpretation of a law that demands action when the governor is "disabled."

"I know these are extraordinary requests but these are extraordinary circumstances," she said.

"State government is paralyzed by a governor who is incapable of governing," Madigan said. "Obviously, the people of Illinois would be best served by the governor resigning immediately."

The state has compiled $4.5 billion in unpaid bills and has had to postpone borrowing in the debt market "indefinitely" because Madigan will not certify debt issues due to the governor's legal problems, state Comptroller Dan Hynes said.

"We don't know if he's in a position to sign those documents. On Tuesday, he was in a holding cell," Hynes said.

He said suppliers may soon refuse to extend more credit to state-run nursing homes, prisons, hospitals, and police.

The charges against Blagojevich come after years of investigation detailed by court-approved wiretaps but the governor has not been indicted and remains governor with full powers. Through his lawyer, Blagojevich has denied doing anything wrong.

OBAMA SENATE SEAT UP IN AIR

The selection of someone to fill Obama's Senate seat remains in limbo. All 50 members of the U.S. Senate Democratic Caucus told Blagojevich in a letter on Wednesday to resign and under no circumstances make an appointment to fill the seat.