Associated Press WriterKANSAS CITY, Mo. (AP) -- Undaunted by the odds, State Auditor Claire McCaskill on Monday said she will seek next year's Democratic nomination for governor and try to deny Gov. Bob Holden a chance at a second term in office.

At a news conference Monday morning in Kansas City, McCaskill made official what had seemed increasingly certain in recent months -- she will run against Holden in the Democratic primary in August 2004.

After making the initial announcement at the Jackson County Courthouse, where she served as county prosecutor from 1993 until being elected state auditor in 1998, McCaskill headed to Columbia and St. Louis where she planned other news conferences.

Her entry in the Democratic race makes Holden just the second incumbent governor to face a significant primary challenge since Missouri first allowed governors to run for second terms in the mid-1960s. In 1980, Gov. Joseph Teasdale overcame a bitter battle in the Democratic primary, then lost that November to Republican Kit Bond.

Some Democrats have said they hoped McCaskill, 50, would refrain from running against Holden, fearing that whoever won the primary would be drained financially and weakened politically heading into the general election campaign.

But others worried that the Democratic hold on the governorship next year was already threatened by the poor economy, the state's budget troubles and Holden's owned mixed fortunes with the Republican-controlled Legislature.

Elected last year to a second term as auditor, McCaskill -- a former state legislator and two-term Jackson County prosecutor -- has long been candid about her plans to seek the Democratic nomination for governor someday.

Until this year, however, those plans had not included a showdown with a Democratic incumbent seeking a second term.

Last October, shortly before her re-election as auditor, McCaskill told reporters it was "my intention to run for governor in 2008." And in a 2001 interview, she said, "I would never run against Bob Holden in a Democratic primary and I don't think anyone would be wise to do that."

She backed away from that pledge in recent months while raising money for an unspecified campaign, however, and her chief spokesman in the auditor's office left that job last month to become interim manager of the St. Louis-based "Friends of Claire" campaign staff.

In a campaign finance report filed last week, McCaskill reported having more than $1.3 million on hand after raising more than $414,500 -- including nearly $130,000 from a personal loan -- from July through September.

Holden's campaign raised $470,284 in the same period, with more than $2.3 million on hand, according to its report to the Missouri Ethics Commission.

Meanwhile, the expected Republican nominee -- Secretary of State Matt Blunt -- reported raising nearly $514,000 from July through September and had over $1.2 million cash on hand at the end of the period. No other candidate for the GOP nomination has come forward so far.

A lawyer by profession, McCaskill was elected to the Missouri House and served four terms. She served on the Jackson County Legislature in 1991-1992, then won the first of two terms as county prosecutor.

Although there was speculation that McCaskill would run for the open governorship in 2000, she chose instead to run in 1998 for state auditor. The position had been held by accountants since 1974.

McCaskill emphasized in her campaign that the elected auditor could hire accountants while expanding the office's focus beyond reviewing the finances of cities and public bodies to scrutinizing state agencies for wasteful spending.

As auditor, she has also used her authority to investigate operations ranging from Missouri's foster care system to the puppy-breeding industry.