Michelle Williams' dad loses challenge to extradition from Australia

SYDNEY - The father of Oscar-nominated Hollywood actress Michelle Williams on Friday lost a round in his court battle to prevent US authorities extraditing him from Australia on tax evasion charges.

Stock market high-flyer Larry Williams, 64, whose daughter was nominated for a best supporting actress Oscar for her role in "Brokeback Mountain" and is the fiance of Australian star Heath Ledger, was arrested in Sydney in May 2006.

The US Internal Revenue Service alleges that the Virgin Islands' resident -- grandfather of Ledger's baby daughter with Michelle Williams -- evaded more than 1.5 million dollars in tax between 1999 and 2001.

Three Federal Court judges Friday dismissed Williams' attempt to restrain the US and Australian magistrates from taking further steps to extradite him.

Williams had successfully applied to the Federal Court earlier this year to have the original extradition application against him ruled invalid.

But the government started fresh extradition proceedings, which will now continue after Friday's ruling.

Williams has remained in Sydney on a million dollars (800,000 US) bail since his arrest, with his movements restricted to certain parts of the city where he had been due to begin a 24-day lecture tour of Australia and New Zealand.

His daughter Michelle and Australian heart-throb Ledger fell in love while filming Ang Lee's Oscar-winning 2005 gay cowboy movie and had a daughter, Matilda, last year.