PHOENIX, Ariz. (AP) _ The Arizona Supreme Court has ruled that Attorney General Bob Corbin and the state grand jury may continue their investigations of Gov. Evan Mecham's unreported $350,000 campaign loan.

The high court, in a 5-0 opinion Tuesday, strongly rejected Mecham's effort to oust Corbin from the probe. The governor claimed the attorney general was violating a confidential attorney-client relationship with him.

''The attorney general does not represent the governor when the governor is not performing official duties,'' the court said in an opinion written by Chief Justice Frank X. Gordon Jr. ''The attorney general has a duty to investigate any claim of wrongdoing by a public officer.''

The decision allows the state grand jury to resume its hearing, which was halted by a court stay issued Nov. 3, the day it was to begin its work. Corbin refused to say when the grand jury will reconvene.

Corbin told reporters, ''I'm very pleased with their ruling,'' and declined to comment further.

Mecham's lawyer, Murray Miller, did not return a phone call seeking comment. Mecham spokesman Ken Smith said: ''Obviously it's a tough decision. We'd rather it went the other way but we can live with it.''

The grand jury plans to investigate Mecham's failure to report the loan from developer Barry Wolfson, whether it was tied to any gubernatorial appointments, and other undisclosed matters.

The Supreme Court rejected Miller's claim that Corbin had a conflict of interest because he had not ruled out running for the governorship himself. ''Such accusations are easy to make and hard to disprove,'' the court said.

The attorney general ''is not the attorney for the governor; he is the attorney for the people and for the state as an entity,'' the court said. Thus, Gordon wrote that Corbin represents Mecham only when the governor is carrying out his official duties.

There is an exception, Gordon wrote, when the attorney general has represented a government official in the specific matter being investigated. However, the court said information presented by Mecham ''falls far short'' of proving that occurred with the Wolfson loan.

If Mecham's attorneys come up with specific information about such a possible conflict, the court ordered Maricopa County Superior Court Judge Thomas O'Toole to consider a stay of the grand jury until the question is resolved.

No loan from Wolfson was listed on Mecham's campaign or personal finance reports; Mecham has said it was reported but has declined to specify how or where. Of the total, $150,000 remains unpaid.

Almost 400,000 signatures on petitions seeking Mecham's recall have been submitted to officials, but they are not expected to be validated immediately.