Noting his previous escape from US authorities, Switzerland's top criminal court has rejected Polanski's appeal to be released from prison because of the "high" risk that the 76-year-old director would try to flee again.
Polanski's offers of bail, house arrest and electronic monitoring failed to sway the tribunal.
Even a Swiss chalet in the luxury resort of Gstaad was brushed aside as insufficient collateral to guard against Polanski fleeing the country, as the United States seeks to have him extradited for having sex with a 13-year-old girl in 1977.
"The appellant has already once in 1978 eluded American criminal proceedings by travelling to Europe," the Federal Criminal Court said in its 17-page verdict, adding that Polanski's transfer to the US could also cause family trauma and cost investors millions of dollars in losses.
"As a result, the motivation to flee is high," it said.
The ruling was another setback to the Oscar-winning director's battle to avoid facing authorities in Los Angeles, where he pleaded guilty to unlawful sexual intercourse with the girl.
He was arrested on an international warrant by the Swiss on September 26 as he arrived in Zurich to receive a lifetime achievement award from a film festival, and has been battling extradition ever since.
Beyond Polanski's legal troubles, the decision could have damaging consequences for his latest film, The Ghost, a political thriller that has several months of work left before it is ready for theatres.
Polanski and his family will go bankrupt if he has to remain in prison, his lawyers told the court. They said continued incarceration would prevent him from finishing the film starring Pierce Brosnan as a fictional British leader and Ewan McGregor as the politician's ghostwriter.
Investors stand to lose $US40 million ($NZ53.74 million) if Polanski isn't freed, they said.
"It's probable that Mr. Polanski will appeal," Polanski's lawyer Herve Temime told reporters in Paris. "I repeat that Mr. Polanski has firmly and strongly stated that he will remain in Switzerland during the entire extradition procedure, regardless of its outcome."
Still, the tribunal in the southern Swiss city of Bellinzona left open several possibilities for Polanski to challenge its verdict in what is expected to be a lengthy legal battle over his extradition.
Polanski has 10 days to appeal the decision on his release to Switzerland's supreme court. He also can continue attempts to persuade the Swiss Justice Ministry to release him. More court proceedings are expected after Washington files its formal extradition request, which it has until November 25 to submit.
Legal experts said no path offered Polanski much hope for a speedy release from jail.
"If someone has already fled once, it makes sense to suspect he might flee again," said Dieter Jann, a former Zurich prosecutor.
Polanski directed such film classics as Rosemary's Baby and Chinatown and won a 2002 directing Oscar in absentia for The Pianist.
He was accused of plying the underage girl with champagne and a Quaalude sedative during a modelling shoot in 1977 and raping her. He was initially indicted on six felony counts, including rape by use of drugs, child molesting and sodomy.
Polanski pleaded guilty to the lesser charge of unlawful sexual intercourse. In exchange, the judge agreed to drop the remaining charges and sentence him to prison for a 90-day psychiatric evaluation.
However, he was released after 42 days by an evaluator who deemed him mentally sound and unlikely to offend again.
The judge responded by saying he was going to send Polanski back to jail for the remainder of the 90 days and afterward he would ask Polanski, a dual French-Polish citizen, to agree to a "voluntary deportation." Polanski then fled the country on February 1, 1978, the day he was scheduled to be sentenced to the additional time.
Since then, Polanski has lived in France, which does not extradite its own citizens.
In its verdict, the Swiss court said Polanski offered to surrender his travel documents, wear an electronic monitoring device and submit himself to daily police checks. Those measures were seen as insufficient to prevent his flight because he could always obtain a new passport or even travel to his French home without papers.
The Swiss court also was concerned that Polanski could avoid the extradition process if he fled Switzerland by helicopter or private airplane.
Lawyers for Polanski offered up the director's Gstaad chalet as collateral, saying it represented more than half of his personal wealth and that it would definitely guarantee his remaining in the country because he has two children he must support through school.
The court, however, sided with Swiss authorities who said even the large bail offer provided insufficient security against flight, and should be made in cash.
The Swiss Justice Ministry said it would examine any new request Polanski submits and evaluate whether it represents a "concrete, realizable" offer as the court ruling suggests. But, spokesman Folco Galli reiterated that detention is only lifted in exceptional cases.
"The point of imprisonment is to ensure that Switzerland can fulfill its treaty obligations on extradition," Galli told The Associated Press. "He can always ask again to be released. But detention is the rule."
It is not clear how much time in jail Polanski faces now, either in Switzerland or in the United States. With appeals, the extradition process in Switzerland could take months. In the United States, Polanski fled before sentencing was complete and is expected to face additional penalties for jumping bail.
