UPDATE: CONVICTED murderer Brett Peter Cowan will remain behind bars after the Queensland Court of Appeal threw out his appeal.
Cowan abducted Sunshine Coast schoolboy Daniel Morcombe on December 7, 2003, and then killed him when he tried to indecently deal with the teen.
Cowan, who has twice before been jailed for violently molesting young boys, dumped the body in Glasshouse Mountains bushland.
Tim Meehan, acting for Cowan, said his client was receptive to the idea of making a special leave application to the High Court.
He said, if he received those instructions, he hoped the court would hear their case afresh.
"We say that the police officers involved in this particular operation overstepped the mark and their illegality rendered the admissions inadmissible," he said.
Mr Meehan said Cowan had expected today's result.
"He's been quite realistic at every step in relation to what his prospects in the court of appeal were," he said.
"He'll be very happy that we actually have a decision.
"We need to examine the decision of the court, the reasons for their rulings, obtain some instructions in relation to that, give advice to our client in relation to the reasons of the court and that will determine what we do."
The appeal court also dismissed an Attorney-General appeal to increase his sentence from life imprisonment with 20 year non-parole.
In a written judgment handed down on Thursday, the court dismissed suggestions a covert police operation to snare him, through an elaborate fake crime organisation, should have been excluded from the trial.
Cowan's lawyers contended using evidence gathered during the covert operation at trial was a miscarriage of justice.
May Daniel now rest in Peace, Australian children can breathe easily now Cowan remains behind bars good riddance— Denise Morcombe (@DeniseMorcombe) May 21, 2015
President Margaret Murdo said Cowan would not have made the admissions had he known the true identity of the undercover police officers but "they were not using the coercive power of the state" when he confessed.
"He believed he was amongst his criminal friends," she said.
"They stressed the need for him to tell the truth so that they could help him.
"He was free to leave their company at any time.
"They were not threatening or violent and in truth had not committed offences with him.
"He chose to make detailed confessions to the offences involving Daniel so as to obtain a watertight, false alibi; to use the alibi to exonerate himself at the inquest when recalled; this would enable him to remain in the criminal gang and to participate in the pending "big job" which would net him $100,000.
"There was no abuse of process in the undercover scenarios leading up to and including his confessions.
"I am unpersuaded that questions of fairness or public policy, individually or in combination, otherwise warrant the exclusion of the confessional and derivative evidence.
"The primary judge's decision not to exclude the evidence was a sound discretionary exercise.
"The failure to exclude the confessions and the derivative evidence as an abuse of process or on public policy grounds has not caused a miscarriage of justice.
"This aspect of the appellant's grounds of appeal is not made out."
An appeal ground relating to jury directions also was not made out.
Cowan's lawyers had suggested the judge should have better informed the jury that the prosecution must prove guilt beyond reasonable doubt.
They argued the jury should have been told that could only occur if they could not infer from the evidence that fellow child sex offender Douglas Jackway was involved, that he had told Leslie Mclean and he had passed on those details.
The defence case was that Cowan made a false confession to undercover cops because he got the information about Daniel through other sources but there was no direct evidence of that.
Not a day of celebration for Bruce Morcombe
Bruce Morcombe won't be celebrating tonight even though Brett Peter Cowan's appeal gas been dismissed.
Speaking to media outside the Brisbane Supreme Court Mr Morcombe said it was "not a day of celebration".
He said the appeal dismissal would cause Cowan to reflect on his actions.
Solicitor Tim Meehan, acting for Cowan, said his client had been realistic about the outcome of the appeal.
He said he would assess the judgment before making decisions about whether to go to the High Court.
EARLIER: Appeal court president Margaret McMurdo and Justice Hugh Fraser were set for a hearing next Tuesday to hear allegations that Chief Justice Tim Carmody showed apprehended bias when he met with a child protection advocate in his chambers.
Justice Carmody, who is now on sick leave for a month, was the third justice sitting on the case of Brett Peter Cowan, who was convicted last year of murdering Sunshine Coast schoolboy Daniel Morcombe.
But he recused himself earlier this month from further involvement in the case - wanting to spare the Morcombe family and Cowan further delays in the case.
Cowan lodged the appeal based on decisions made during pre-trial hearings, specifically admissibility of Cowan's confessions to covert police and publicity surrounding the case.
He also raised jury directions and other perceived issues during the trial.
Cowan was found guilty of taking Daniel Morcombe from beneath the Kiel Mountain Rd overpass on December 7, 2003, indecently touching him and then dumping his body in Glasshouse Mountains bushland after killing him through a chokerhold.
He maintained he fabricated the story he told undercover police in Western Australia during an elaborate sting.
The Attorney-General also lodged an appeal arguing Cowan's sentence - life imprisonment with a 20-year non-parole period - was manifestly inadequate.
Depending on the outcome of legal argument expected when the case is mentioned in Brisbane at 1.45pm, Justices McMurdo and Fraser could finally hand down their judgments on the appeal.
The delays in handing down the judgment have angered the Morcombes who will be there in case judgment is delivered.
If Cowan is not happy with the outcome of the appeal, he can still take his case to the High Court of Australia
Bruce and Denise Morcombe could hear appeal verdict today
BRUCE and Denise Morcombe could hear today whether an appeal against the murder conviction of Brett Peter Cowan is successful or not.
If successful, Cowan could walk free until a retrial is ordered.
Cowan had confessed to killing Sunshine Coast teenager to undercover police in a covert 'Mr Bigs' police sting.
Daniel was abducted from under the Kiel Mountain overpass near Palmwoods in December 2003 while waiting for a bus.
He had planned to go to Sunshine Plaza to get Christmas presents for his family.
Lawyers have argued that Cowan should not have been convicted.
They say the confession, captured on video by police, was unfair and should not have been allowed in court.
Cowan was sentenced to life in prison in 2014 with a non-parole period of 20 years.
Former Attorney-General and Member for Kawana Jarrod Bleijie lodged a separate heal to increase Cowan's non-parole period.
The state's top judicial officer cited delays in justice for both Daniel Morcombe's family and convicted murderer among his reasons.
Lawyers for Cowan were set to argue Justice Carmody had shown bias when he had a meeting on April 15 with child protection advocate Hetty Johnston, who had spoken publicly against Cowan and argued he should never be released.
Justice Carmody was one of three justices who heard Cowan's appeal last November.
The appeal decision will now fall to the remaining justices - president Margaret McMurdo and Justice Hugh Fraser.
There is a chance the pair could hand down their already complete judgments on that day, but another possible outcome, one an angry Morcombe family fears, is the appeal will be heard afresh before new judges.