The moderate former Democrat recorded the largest margin of victory ever for a Republican in solidly Democratic New York.

He had concentrated his campaign on economic redevelopment projects, particularly the reconstruction of Ground Zero, the site of the destroyed World Trade Center.

Analysts say Mr Bloomberg's main achievement has been to make the running of New York City all about competence, and not class or colour

A billionaire who founded the Bloomberg financial news service, he spent up to $100m of his own money in his re-election campaign.

Schwarzenegger defeated

California ran an even more expensive campaign - as much as $300m, reports say.

 

Despite the huge expense, little will change in the Golden State, as voters rejected all eight measures being put to them.

The result is being seen as a huge blow to Gov Schwarzenegger, who campaigned on behalf of four of the eight propositions.

He had proposed capping the state budget, taking the power to draw electoral districts away from politicians, and increasing the length of time teachers had to work before gaining tenure.

The across-the-board rejection of his agenda may reflect voter dissatisfaction with Gov Schwarzenegger, whose popularity has fallen fast since he came to power in a special election two years ago.

Only one in three California voters approves of his performance, polls suggest.

He announced recently he would run for re-election in 2006.

A proposition requiring minors to notify their parents before getting abortions was also defeated. Gov Schwarzenegger did not campaign on behalf of that measure.

Cheer for Democrats

Democrats retained two governorships in expensive, vitriolic races on the other side of the country.

Lt Gov Tim Kaine defeated Republican candidate Jerry Kilgore, despite a last-minute visit to Virginia and personal appeal to voters by President Bush.

 

Mr Kaine succeeded his boss, Mark Warner, who was forbidden by law from running for a second term. Mr Warner is considered a likely presidential candidate in 2008.

With more than 99% of the votes counted, Mr Kaine had taken almost 52% of the vote compared with Mr Kilgore's 46%.

In New Jersey, Jon Corzine beat his opponent Doug Forrester in a battle between wealthy businessmen who have turned to politics.

Mr Corzine is currently a US senator. As governor, he will appoint his own replacement to complete his term, which ends in 2007.

Politicians had been watching the elections for the two governor posts, to see whether President Bush's unpopularity is damaging his fellow Republicans.

It is thought that the outcome in those states could provide an early indication of voting intentions for next year's mid-term elections.

Democratic Party chairman Howard Dean said voters had reacted against President Bush's party.

Voters "don't like the abuse of power. They don't like the culture of corruption. They want the nation to go in a different way," he said.

While it is still unlikely the Democrats will manage to win back control of Congress in those elections, Tuesday's wins have given them considerable cheer, the BBC's Justin Webb in Washington says.

In other election results across the country:

 

• Texas banned gay marriage, while Maine banned discrimination against homosexuals

   

• Eight school board members in Pennsylvania who supported an alternative to Darwin's theory of evolution lost their seats to evolution supporters.