It was the confrontation this huge state had waited for: the relentless, incisive Watergate attorney imported from Washington versus the bumbling governor fighting for his political life.

To their surprise, Alaskans woke up this morning to find the governor still on his feet.

More televised questioning of Gov. William Sheffield by an array of state senators continued tonight, but key legislators agreed that the effort to impeach the governor for alleged lies to a grand jury seemed all but dead.

A poll by the daily Juneau Empire found seven of the 20 state senators against impeachment and only two for it even before what state Sen. Tim Kelly, the Republican leading the inquiry, called the "very candid" testimony of the Democratic governor. Through it all, some observers detected a reluctance to levy so drastic a punishment for questionable financial dealings in a state where abundant oil money has allowed many politicians to nurse pet projects.

Throughout his duel with former Senate Watergate committee counsel Sam Dash Tuesday night, and in a long interrogation by state senators tonight, Sheffield said repeatedly that he could not remember a key meeting with a Fairbanks labor leader seeking his help in obtaining a $9 million state office lease.

Sheffield said he had no inkling, until a grand jury took up the matter, that his chief of staff had intentionally destroyed documents about the deal and lied to state investigators about steering the contract to the governor's friend. "I wish he hadn't done that," said Sheffield, who acknowledged that his staff might have been "overly protective" but said he saw nothing wrong or illegal in the way the lease, now canceled, had been granted.

It was a performance that led one experienced television commentator to conclude that the governor had come off looking "dumb but honest." Calls to a late-night Fairbanks radio talk show from people who had watched the hearing on televison were almost all pro-Sheffield.

Sen. Vic Fischer (D-Anchorage), who said he had reserved judgment until the governor testified, noted that some thought Sheffield could have been impeached only "if he pulled out a smoking gun and shot himself in the foot."

The governor's performance, Fischer said, "was excellent." Even before the impeachment effort, Sheffield's lackluster record appeared to preclude any chance of reelection next year, but at least he has a chance to leave office "with some dignity," Fischer said. Sheffield aides, citing political comebacks in a state that cherishes mavericks, were even more optimistic.

Sheffield, 57, overcame a poverty-stricken boyhood and a severe stutter to build what is now the largest hotel chain in Alaska and the Yukon. He won the governorship in 1982 by visiting nearly every village and spending $2 million -- a record for this state with fewer than 200,000 voters.

But he remained an awkward speaker, with a severe facial tic seen often during the hearings Tuesday and tonight. His public image suffered from what appeared to be a wealthy man's inability to see that some practices that worked in business would not do in the governor's mansion. Within months of taking office, he secured $150,000 in contributions from wealthy oil investors in Houston, Dallas and Denver to help pay off his campaign debts, and shortly afterward dropped his opposition to offshore oil and gas leasing in Norton Sound, in response, he said, to promised federal environmental protections.

The cost of a major renovation of the governor's mansion swelled from $1 million to $2.4 million and drew unfavorable comment because, to save time, Sheffield's administration had not sought competitive bids. Opponents complained of his failure to investigate North Slope borough contractors accused of shady practices who had given Sheffield's campaign fund $90,000.

The grumbles turned to banner headlines when a superior court grand jury, encouraged by a state chief prosecutor known for investigations of politicians, called for Sheffield's impeachment July 1. The grand jury's report concerned a state office lease granted a building in downtown Fairbanks in which Joseph (Lenny) Arsenault, an official of the Plumbers and Steamfitters International Union, had a 2 percent interest.

Testimony by Arsenault, who raised $92,000 for the governor's campaign fund, and Sheffield chief of staff John Shively, granted immunity in the investigation, indicated that they had arranged, with the governor's assent, to draft state specifications so that only Arsenault's building could qualify for the lease.

In a move that still rankles many senators here, chief prosecutor Dan Hickey and special prosecutor George Frampton, another Watergate veteran, persuaded the grand jury that the evidence was too slight to indict Sheffield for any crime. But they suggested that the jurors call for his impeachment for allegedly perjuring himself by saying he could not remember helping steer the lease to Arsenault.

To counter Dash, hired as the state Senate Rules Committee's chief counsel in the impeachment probe, Sheffield hired Philip A. Lacovara, former member of the Watergate special prosecutor's staff. Appearing before the senators, Sheffield stuck to his grand jury testimony that he could not remember helping steer the lease to Arsenault. At the time of a crucial Oct. 2 meeting with Shively and Arsenault, he was preparing for a trip to China and a speech in Valdez, Alaska. Compared with those problems, the Fairbanks lease would have been of "minor interest," the governor said.

Sheffield Tuesday night told senators: "I racked my brain . . . . I tried to figure out why I couldn't remember it. It's highly probable that it happened, but I'm sure I can't remember it."

He said he could remember turning down an Arsenault recommendation for a judgeship and telling his staff that he thought Arsenault's building would be a good place for state offices, but the Oct. 2 meeting, he said, was a blank.

Dash asked how some things about the project could stick in Sheffield's mind but not others. The governor had no answer. "If I could recall that meeting," he said, "we probably wouldn't be here tonight."