THE former presidential front-runner, John McCain, may drop out of the 2008 race by September if his fundraising dries up and his poll ratings continue to drop, according to Republican insiders.

The speculation, vigorously denied by McCain’s camp, is sweeping Republican circles after a disastrous few weeks in which the principled Arizona senator has clashed with the party’s conservative base on immigration and also alienated independent voters by backing President George W Bush’s troop surge in Iraq.

Randy Pullen, chairman of the Arizona Republican party, said: “He’s a battler, so I’d expect him to carry on, but everyone is waiting to see what his new fundraising totals are. That’s pretty critical. If he doesn’t have the money, he won’t be able to run.”

The second fundraising quarter for candidates closes at the end of June and McCain’s results should be known by mid-July.

Dan Schnur, McCain’s communications director during the 2000 presidential campaign, said it was “possible” that he could drop out: “There are all sorts of challenges McCain is facing, from fundraising to Fred Thompson and the Iraq war, but the biggest single boulder in his path is the immigration issue.”

One veteran Republican consultant put the odds of McCain remaining in the race beyond the autumn at 3-1 against. “He’ll be gone by September,” predicted Tom Edmonds, who is not affiliated with any campaign.

“The wheels are coming off his wagon and it’s hard to see how he can recover. He won’t be able to pay all the good talent he has hired and they’ll want to drift away from a loser.”

A poll by Rasmussen Reports last week showed McCain lying joint third with Mitt Romney, the Mormon former governor of Massachussetts, with the support of just 10% of Republican voters. This compared with 28% for Fred Thompson, the former Tennessee senator, and 27% for Rudy Giuliani, New York’s mayor at the time of the September 11 terrorist attacks.

Another poll in Iowa, a crucial early voting state, put McCain in fifth place behind Mike Hucka-bee, the former governor of Arkansas, with only 6%.

McCain has already shed some high-level staff to save money and could slim down further, according to Schnur.

“If another difficult fundraising report forces McCain to retool his campaign and run again as an insurgent and outsider, it might not be a bad thing,” he said. “His best days as a campaigner in 2000 came when he faced extremely formidable opponents on a shoestring budget and a skeleton staff.”

Feelings are running so high against Bush’s immigration bill, which opponents decry as an amnesty for illegal immigrants, that McCain may not win the support of Arizona, his home state on the border of Mexico.

“It looks to me like Arizona will be in play,” Pullen said. “The immigration issue is clearly hurting him with the base of the party.”

Supporters and critics agree that McCain’s resolute, battle-tested character could prevent him leaving the race, no matter what the difficulties.

“Given his disposition and his history, it’s more unlikely for him [to drop out] than other candidates facing the same situation,” said Schnur.

A McCain campaign insider said: “Reports of his death are greatly exaggerated. We’re in the precampaign phase when everybody is trying hysterically to read the tea leaves, but after September the lights will go on and everybody will see that we’ve got a candidate who has stood before, doesn’t need on-the-job training and has the resources to compete.”

McCain recently decided not to stand in a straw poll to be held in Iowa in August, fearing an embarrassing defeat.

Giuliani is forgoing the event for the same reason, but has managed to cling on to the lead in most polls despite a turbulent few weeks. Thomas Ravenel, who chaired Giuliani’s campaign in South Carolina, was charged last week with conspiring to distribute crack cocaine.

McCain faces a further challenge if Michael Bloomberg, the mayor of New York, decides to stand and courts the same independent voters as the former Vietnam prisoner of war, as well as using a predicted $1 billion of his fortune.

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