John McCain’s faltering presidential campaign yesterday appeared down - if not yet out - as a cash crisis forced him to cut his staff numbers by more than a third.

The Republican senator, once considered the frontrunner for his party’s presidential nomination, released figures showing he had raised just $11.2 million in the last three months.

Aides acknowledged he would now fall far short of his target income of $100 million this year and it is believed he now has just $2 million cash-in-hand to pay for a top-heavy campaign organisation which once numbered 150 staff members.

The financial difficulties have been compounded by plummeting opinion poll ratings, some of which now put his support in the single digits.

Mr McCain’s campaign had sought to appeal to conservative Republicans suspicious of his maverick past - which included controversial fund-raising reforms - by hiring many of the advisers who propelled President Bush to victory in successive elections.

But he has lost support of independent voters by allying himself closely to Mr Bush’s Iraq war strategy while further alienating the Republican base by co-sponsoring with Democratic Senator Edward Kennedy an immigration bill proposing legal rights for undocumented workers. Others have suggested that Mr McCain, who turns 71 this summer, is simply too old.

Last week he dismissed speculation that he would drop out of the race as “ridiculous,” adding: “I don’t know why I would even remotely consider such a thing in the month of June, or July.” Terry Nelson, the campaign manager, said yesterday: “We confronted reality and we dealt with it in the best way that we could so that we could move forward.” He added: “John McCain will win the fight.”

Senior aides are expected to take pay cuts while Mr Nelson confirmed he would be working for free over the coming months. Although he would not comment on the scale of staff cuts, it is thought that around 50 will lose their jobs.

Mr McCain’s fundraising total in the second financial quarter, which ended Saturday, is expected to trail those of his chief rivals, Mitt Romney and Rudy Giuliani. Fred Thompson, another likely Republican candidate who has not yet announced his entry into the contest, is said to have raised $5million in the past month.

In the first quarter, McCain raised $13.6 million, well behind Mr Romney and Mr Giuliani, both of whom have smaller staffs. Mr Romney, who has already spent $4 million on TV advertising raising his profile in the states which kick off the nomination process, is expected to supplement his fund-raising with huge loans from his estimated $350 million personal fortune.

The shake-up comes as Mr McCain embarks on his sixth trip to Iraq, where he will spend the July 4 holiday with US troops. In his last visit to Iraq in April, he was widely criticised for saying he was cautiously optimistic of success even as he toured Baghdad under heavy military guard. Iraqis accused him of painting too rosy a picture.

As reported in later editions of The Times yesterday the Democratic race is generating unprecedented sums of money. Barack Obama has announced he raised at least $32.5 million in the last three months.

At least $31 million of Mr Obama’s total is for his primary bid, with the rest available only if he wins the Democratic nomination and enters the general election campaign. By comparison, Hillary Clinton raised about $27 million, of which $6 million is reserved for a later contest if she wins the party’s nomination.

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