Barack Obama is in danger of being outspent by John McCain and the Republican Party in the final 49 days of the US presidential race, despite having smashed all records for fundraising this year.

The Democratic nominee began the summer by refusing public money amid confidence that the enthusiasm of small donors would overwhelm the Republican money machine that traditionally grinds up opponents in the closing stages of the campaign.

At the weekend, Mr Obama was reported to have raised $66 million (£37 million) last month, taking his total to $455 million so far – more than any presidential candidate in history. He finished August with $77 million in the bank, twice the cash-in-hand total of Mr McCain, and has a vast donor army of 2.5 million people. When estimated figures for the campaign war chests built up by each of their respective parties are included, however, the Republicans appear to have more money to spend: $110 million compared with the Democrats’ total of $94.5 million.

Mr McCain has access to an additional $85 million of public subsidies and, while this prevents him raising any more money for his campaign, the Republican National Committee predicts that with Sarah Palin revitalising the party’s base it can generate at least another $100 million. That would leave Mr Obama and the Democratic National Committee needing to find another $200 million before election day on November 4 if he is to keep up.

A strategist on Mr McCain’s campaign told The Times yesterday: “It’s now clear that the huge advantage Obama’s team thought they would have – of $100 million, $200 million or more – is just not going to materialise. There is a better than 50-50 chance that they will not have any advantage at all.” The Democratic nominee is having to divide his time between the campaign trail and fundraising events for rich benefactors giving the legal maximum of $2,300 which, for all the attention lavished on the small contributions that he receives over the internet, are from where most his money still comes.

He will spend today far from the key election battlegrounds alongside the likes of Barbra Streisand asking for contributions in Beverly Hills and hoping to rake in $9 million in a single day. Mr McCain and Mrs Palin, with the help of their taxpayers’ subsidy, are free to focus on winning votes.

Some Democrats are beginning to question not only the wisdom of Mr Obama turning down public money but also his heavy investment in ground operations across a swath of solid Republican states such as Montana, North Carolina, Georgia, Mississippi and North Dakota.

His campaign has spent $20 million on a voter registration drive for Latinos and boasts 2,500 employees. In July, his expenditure of $57 million exceeded his income and was substantially more than that of Mr McCain. Spending in August was even higher, with costly prime-time advertisements bought during the Olympics coverage.

Anthony Corrado, an expert on political finances at the Brookings Institution, said: “Obama has set himself a very ambitious target which means he must maintain record levels of income over the next 50 days.”

Professor Corrado believes that the decision to forgo public money was spurred chiefly by a desire to maintain control over advertising, reflecting the lessons learnt from 2004 when the Democratic Party produced messages that conflicted with the tone of John Kerry’s campaign.

It was for similar reasons that Mr Obama made plain this year his hostility to the outside groups known as “527s” by dint of the tax code under which they operate. In recent weeks, however, the Obama campaign has shifted position and is understood to be letting donors know that they are welcome to back such groups, not least because right-wing 527s including Leadership for America’s Future and Freedom’s Watch are spending heavily on negative advertising.

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