WASHINGTON – Squelching rumors of his retirement, Chief Justice Rehnquist said yesterday he will continue heading the Supreme Court while battling thyroid cancer. “I’m not about to announce my retirement,” he said.

“I want to put to rest the speculation and unfounded rumors of my imminent retirement,” Chief Justice Rehnquist, 80, said. “I will continue to perform my duties as chief justice as long as my health permits.”

Chief Justice Rehnquist issued the statement hours after being released from an Arlington, Va., hospital after being treated for two days with a fever.

President Bush had not been informed in advance about Chief Justice Rehnquist’s statement, but the White House welcomed the chief justice’s announcement.

“The chief justice is doing an outstanding job, and we are pleased he will continue his great service to the nation,” presidential spokesman Scott McClellan said.

His declaration scrambles an unsettled situation on the high court for the second time in less than two weeks. Justice O’Connor unexpectedly stepped down earlier this month at a time when the White House, the Senate, and outside groups had been preparing for the chief justice to leave the court.

Rumors of his departure intensified after Chief Justice Rehnquist was hospitalized. The White House was proceeding with contingency plans to fill two vacancies, a prospect that might have given Mr. Bush the political flexibility to please more than one constituency. Now that just one seat is vacant, Mr. Bush is likely to come under intense pressure from his political base to nominate a hardline conservative.

Still, this is the first vacancy of Mr. Bush’s presidency, and even one new justice to the court has the potential to tip the balance on critical issues such as abortion, affirmative action, and gay rights.

Chief Justice Rehnquist, who has been through at least one round of chemotherapy and radiation, surprised many people when he presided at Mr. Bush’s inauguration in January and returned to the bench in March, keeping a full schedule.

But outside of a handful of brief statements issued by the court since October, Chief Justice Rehnquist has said nothing publicly about his condition or prognosis. He had also said nothing about his plans on the bench despite the vigil kept by reporters and photographers outside his home.

“I think this is going to put the speculation to rest,” a Los Angeles attorney and former Supreme Court clerk, Edward Lazarus, said. “He’s saying, ‘I’m here and I’m not going anywhere.'”

Chief Justice Rehnquist gave no clue how long he’ll remain on the bench, but observers said that’s not unusual because justices rarely tip their hand.

“This should allow the chief and the court to get on with their business,” a former law clerk under Chief Justice Rehnquist, Richard Garnett, said. “I’m confident the chief justice would not come to this decision unless he was convinced he could lead the court in the dignified and efficient manner he has been.”

Medical experts initially speculated that Chief Justice Rehnquist probably had the deadly anaplastic form of thyroid cancer, based on the chemotherapy-radiation treatment. But now that seems less likely.

“The prognosis for that is so poor. Most patients succumb very quickly, within three to six months,” a cancer expert at Beth Israel Hospital in New York, Dr. Mark Urken, said.

It is more likely that Chief Justice Rehnquist has another more treatable type, said Dr. Urken and other physicians not involved in his treatment.

A thyroid specialist at Washington Hospital Center, Dr. Kenneth Burman, said other possibilities are papillary thyroid cancer or lymphoma of the thyroid. People with those types can be treated and live for years without more problems.

Before last night, Chief Justice Rehnquist had said nothing in public about his future until last week, when a reporter called out to him outside his house to respond to retirement rumors. “That’s for me to know and you to find out,” Chief Justice Rehnquist replied.

Unless another justice unexpectedly retires, Chief Justice Rehnquist’s announcement removes the immediate possibility of a double vacancy, which could have changed Mr. Bush’s thinking in nominating someone to fill Justice O’Connor’s seat.