WASHINGTON – Defiant and dug in,

said late Sunday that he would not resign, declaring instead that he will complete his term and then retire from Congress in 2012.

The surprising decision came one day after senior Democratic leaders urged the seven-term Democrat to resign quickly after reports that he was accused of an unwanted and aggressive sexual encounter with a young woman last November.

Wu did not issue a formal statement or appear in public on Sunday. A senior Democratic official confirmed for The Oregonian that Wu had made the decision.

The news did not sit well with Democratic leaders, who have been pressing Wu to step down after concluding he can no longer be effective and that the continued presence of a lawmaker accused of inappropriate sexual acts could damage the party's chances going into the 2012 elections.

immediately called for an ethics investigation into Wu's encounter with the daughter of a longtime friend and campaign donor in California during a visit over Thanksgiving.

"I call on the Ethics Committee to initiate an investigation into the allegations against Congressman Wu," she said in a statement. "With deep disappointment and sadness about this situation, I hope that the Ethics Committee will take up this matter."

She said she would send a letter to the Ethics Committee today asking for a formal review.

Pelosi's reaction was followed by an even tougher statement from

, who chairs

and is responsible for the political fortunes of House Democrats.

"New allegations of unacceptable behavior by Congressman Wu are extremely serious and disturbing. I strongly agree with Leader Pelosi's request that the House Ethics Committee use its authority to begin an immediate investigation," Israel said in a statement.

The burst of activity came after 10 p.m. EDT following

"He isn't going to be running for reelection," POLITICO quoted an unnamed advisor to Wu as saying. "But he hasn't done anything that rises to the level of requiring him to resign."

The emphatic announcement caught many Democrats by surprise. It came on a day when Wu remained largely secluded in what Democratic sources said they hoped was contemplation that would move him closer to a decision to quit.

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Wu has been the subject of unflattering news for months, the result of erratic behavior last fall that led to the departure of most of his senior staff and his acknowledgment that he required counseling and treatment.

But whatever tolerance there was among Democratic leaders in Washington and Oregon for his behavior virtually evaporated with the revelation of the sexual accusation, first reported Friday evening by The Oregonian.

The incident became known to Wu's staff when the young woman left a distraught message in May on the phone line of the congressman's district office in Portland. She accused Wu of aggressive and unwanted sexual behavior, according to sources with direct knowledge of the message and its contents.

The young woman and her family have declined comment. The Oregonian is not identifying her. The newspaper has a policy of not naming possible victims of sexual assault unless they request it.

Wu, 56, has refused to answer questions about the incident.

Now that Wu has decided to stay in office, congressional aides and others with experience in similar cases say pressure to resign will increase in the coming days.

In that sequence, the demand for an ethics investigation of the incident is the first step.

Wu's announcement may also influence opinion in his district.

It may be quantified on Wednesday when Washington County Democrats are expected to vote on a no confidence measure. Party member David Robinson of Aloha is pressing the effort.

Robinson, a commander in the Navy Reserves, ran against Wu in the 2010 Democratic primary, losing with 19 percent of the vote. He first considered pushing the no-confidence vote this winter, after reports first surfaced regarding Wu's troubled 2010 reelection campaign.

He dropped it, but resurrected the motion this weekend when he saw "a pattern of behavior" emerge, he said

Robinson would have to clear a few procedural hurdles to bring his measure to a vote. And it's not clear how much support he enjoys among party activists. Karen Packer, chairwoman of the Democratic Party of Washington County, said she couldn't predict the result of Wednesday's possible vote. "That's going to depend on what happens in the next couple days," Packer said.

Announced challengers to Wu in next year's Democratic primary reacted swiftly Sunday night.

"David Wu's reported plan to remain in office but not seek re-election puts David Wu first and his constituents last,"

said in a prepared statement sent to reporters.

said Wu's announcement prompts new concerns. "Will he be at all effective?" Witt asked. "That's very much in question."

Beth Slovic of The Oregonian staff contributed to this report.