BOSTON--William H. Walsh, a fixture of Cambridge politics for the past decade, is a city councillor no longer.

Associate Justice Neil L. Lynch of the Supreme Judicial Court (SJC) ruled yesterday afternoon that Walsh can no longer serve on the council based on a state statute barring felons sentenced to prison from elected office.

Walsh was indicted on 59 counts of bank fraud and making false statements to the Dime Savings Bank in October of 1992, and was convicted on 41 counts this past March.

Walsh was sentenced to 18 months in prison Tuesday, but remains free pending appeal.

Before the sentence was handed down, Assistant Attorney General Peter Sacks informed all city councillors that, according to a state law, Walsh would have to relinquish his office if sentenced to prison.

Walsh disputed whether the statute was applicable to him.

Sacks sought a preliminary injunction to bar Walsh from the council yesterday morning at a single-justice session of the SJC held before Lynch.

At the hearing, Walsh's attorney James L. Sultan pointed out that the statute calls for the removal of "a convict sentenced...by a court of the United States to a federal penitentiary"

Sultan argued that it has not yet been determined where Walsh will serve his sentence, and his crime was not serious enough to warrant imprisonment in a penitentiary.

He added that removing an official elected by the people was "contrary to the way our democracy works," so it should only be done based on an explicit law.

But Sacks argued, and Lynch agreed, that courts are no longer empowered to determine where sentences are carried out, and that the intent of the statute was to bar officials sentenced to any federal correctional institutions.

Walsh vowed to fight on, both to regain his council seat and to prove his innocence in an appeal.

"I'm going to keep fighting," he said. "If you felt you were guilty, you could just sit there and take it, but that's not the case."

He said there is a possibility that he would seek a ruling before the full SJC on whether he can retain his seat.

"I'll talk to Jamie [Sultan] in the morning," Walsh said.

Walsh also said he would be eligible to run for re-election next year, regardless of the status of his appeal, because the statute only applies to the current term.

Judge Lynch's ruling bars Walsh from serving "for any remaining portion of the term to which he was elected in November, 1993."

Walsh, who has been the Council's strongest opponent of rent control, said he is sorry to leave the council at the height of debate on the issue.

"I was very honored to be there when rent control fell," Walsh said. "But I would obviously have liked to be there to finish it. That was the only thing I wanted to do."

Walsh said he may be seen around City Hall in the near future.

"I may well attend council meetings as an observer," he said.

City solicitor Russell B. Higley, who stated his opinion last March that Walsh would be removed when sentenced to prison, said he was not surprised by the judge's ruling.

"The court's opinion was the same thing that we've all said all along," Higley said.

Other councillors did not seem surprised, either.

Mayor Kenneth E. Reeves '72 said, "We knew it was a matter of time [before he was removed], and the time is here."

"It is a dark day in Cambridge when a councillor can't serve because of a conviction and sentence," Reeves said. "you have to feel compassion for the man."

Councillor Francis H. Duehay '55 said he didn't understand why Walsh tried to remain on the council after his sentencing.

"The law was very clear," Duehay said. "The statute speaks for itself."

Councilor Michael A. Sullivan said Walsh's voice will be missed in council debates