Mrs Clinton's narrow upset of Mr Obama in New Hampshire on Tuesday set up a tough and possibly lengthy Democratic nominating battle that heads to Nevada and South Carolina and on to the Feb 5 'Super Tuesday' contests in 22 states.

Arizona senator John McCain, meanwhile, headed to the next Republican battleground of Michigan with fresh momentum from his New Hampshire win, hoping to score over rival Republican Mitt Romney, who dropped his television advertising in South Carolina and Florida to focus on Michigan.

The state-by-state race to pick candidates for the November election to succeed President George W. Bush shifted from the intimate, face-to-face politics of Iowa and New Hampshire to a wider national campaign driven by big-money television ads and cross-country plane trips.

Among the Democrats, the immediate focus of both the Clinton and Obama campaigns was the Nevada caucuses on Jan 19, which are shaping up as a head-to-head test of the strength of both candidates.

Mr Obama and Mrs Clinton dispatched their field staffs there from Iowa last week, and Mrs Clinton plans to visit Nevada on Thursday.

Mr Obama won the backing of the Culinary Workers Union in Nevada, a major force in the state that holds its Democratic contest on Jan 19.

The union's 60,000 members, many of them Hispanic, work in the famed hotels and casinos on the Las Vegas strip.

Meanwhile, reports said Governor Bill Richardson of New Mexico was expected to announce today that he will pull out of the presidential race after coming fourth in both the New Hampshire primary and the Iowa caucuses, according to people with knowledge of his decision.

Mr Richardson made the decision after returning to New Mexico on Wednesday and meeting his top advisers, reports said.

In the Republican camp, the 71-year-old Mr McCain's political rebirth also gave his once-struggling campaign new life and put him in the midst of a wild scramble for the Republican nomination that has so far produced no clear favourite.

'This state can again play a key role. We won here in 2000 and we will win again in 2008,' Mr McCain told an airport rally in Grand Rapids, the first of two Michigan stops before he heads to South Carolina for two days of campaigning.

Mr McCain's Republican win was a spectacular comeback for the former Vietnam prisoner of war, who was written off as a candidate in the summer.

New Hampshire's voters refused to follow the lead of Iowa, which last week gave Mr Obama, 46, and Republican Mike Huckabee, 52, a former Arkansas governor, the first big wins of the US presidential race.

The typically stoic Mrs Clinton conceded that an emotional moment during a pre-election rally on Monday, in which she came close to tears as she discussed her reasons for wanting the presidency, may have helped her.

'I had this incredible moment of connection with the voters of New Hampshire and they saw it and they heard it,' she said on the CBS programme Early Show.

Mrs Clinton, 60, who finished third in Iowa, faced predictions of doom before New Hampshire. Polls showed her trailing Mr Obama by double-digit margins, but she pulled off a narrow win.

Mr Obama, the Illinois senator bidding to be the first black president, had hoped for a New Hampshire win that would solidify his hold on the top spot in the race.

Mr Obama's campaign also reported a new wave of donations, raising more than US$8 million (S$11.5 million) in the first eight days of 2008, campaign manager David Plouffe said. The campaign had raised US$23.5 million in the last three months of 2007, he said.

REUTERS, NEW YORK TIMES