Barack Obama takes a big step towards becoming the first black US President

Last night, after a gruelling six-month fight, Hillary Clinton said she was "open" to becoming Mr Obama's vice-presidential running mate.

She spoke out as her opponent finally secured the delegates needed to secure the Democrats' nomination.

If Mr Obama is exhausted from the often bitter fight for that nomination, which ended yesterday in the polling booths of Montana and South Dakota, he is not showing it.

He arranged a victory celebration at the site of this summer's Republican National Convention in St Paul, Minnesota – an in-your-face gesture to Republican presidential candidate John McCain.

In front of an audience of thousands, Mr Obama praised his rival and dedicated his victory to his grandmother Sarah Obama in Hawaii whom he said "helped make me the man I am today".

"Tonight is for her."

Mr Obama paid tribute to Mrs Clinton and said she had made him a "better candidate".

The junior senator added: "Senator Hillary Clinton has made history in this campaign, not just because she is a woman who has done what no woman has done before, but because she is a leader who has inspired millions of Americans with her strength, her courage and her commitment to the causes that brought us here."

He congratulated Mrs Clinton on her campaign and also praised former president Bill Clinton's economic policies.

Mr Obama acknowledged he and Mrs Clinton "certainly had our differences this past 18 months" but praised her desire to improve the lives of ordinary Americans.

"And you can rest assured that when we finally win the battle for universal healthcare in this country, and we will win that fight, she will be central to that victory," Mr Obama said.

"Our party and our country are better off because of her and I am a better candidate for having had the honour to compete with Hillary Rodham Clinton."

He had clinched the nomination on the final day of one of the closest and most expensive primary seasons in memory.

A more taxing fight against Mr McCain comes next, and now he must find renewed energy to convince the American people he is better prepared than his opponent to address the major issues that confront the nation.

There is an unpopular war in Iraq to bring to an end; a fast-sinking economy to repair; almost a sixth of the population without health insurance; and a college education system that increasing numbers can no longer afford. Then there is the ever-present threat of a new terrorist attack on the US mainland.

Mr Obama, who has won the support of nearly nine out of ten black voters, also has to convince a lot of white and Hispanic Americans that he really does stand for them, too. The issue was raised in a conference call between Mrs Clinton and members of the New York congressional delegation.

In it, Representative Lydia Velasquez said she believed the best way for Mr Obama to win over Hispanics and members of other key voting blocs would be to accept the former first lady as his running mate.

"I am open to it," Mrs Clinton replied, on the proviso that it would help the party's prospects in the presidential election in November.

But Andrew Kohut, president of the independent Pew Research Centre, warned: "Obama has to deal with the issue of white working-class reservations about him."

All of this and the forthcoming battle with Mr McCain makes the spat with Mrs Clinton over the favours of a few superdelegates look like a cakewalk by comparison.

It also places huge expectations on the shoulders of a candidate whose experience of public service in Washington DC stretches back only to his 2004 election as a senator for Illinois.

"This is a defining moment in our history," he tells voters in his election manifesto, A Blueprint for Change. "Our moment is now. I don't want to spend the next year or the next four years re-fighting the same fights that we had in the 1990s."

Uniting a party, fractured by arguments over disputed primaries in Michigan and Florida, and by the huge gulf between his team and the Clinton camp, will be his first priority.

"We've got a lot of work to do in terms of bringing the party together," he said before yesterday's final primaries. "The sooner we can do that, the sooner we can start focusing on John McCain."

The key battlegrounds have already been set – the economy, healthcare and social security, Iraq and homeland security. Mr McCain would appear to have a head-start on campaigning, having been his party's nominee for many weeks.

But Mr Obama's aides will argue that their man has momentum behind him and, at 46, is fresher than his 71-year-old Republican opponent.

Opinion polls also make happier reading for the Obama camp than previously. A Gallup poll released yesterday showed him with a 47 per cent approval rating to McCain's 44 per cent, an almost exact reversal of their positions a month ago.

However, one sobering message from the survey was that 55 per cent said they were worse off financially than a year ago, the gloomiest outlook since 1976.

The battered state of the nation's economy is arguably the most pressing concern for Mr Obama.

The subprime mortgage crisis and subsequent repossession of hundreds of thousands of homes have left deep wounds that extend far beyond the housing market – causing the collapse of banks, millions to lose their jobs and a loosening of the country's hold on global markets.

Petrol prices are soaring, while the dollar stands at an all-time low against the euro – and is significantly weaker against many other currencies. including the pound. In addition, the middle classes are angry that the bulk of tax cuts have been directed towards the rich.

Mr Obama says he will immediately give all working families a $1,000 (500) tax credit and crack down on fraudulent brokers and lenders to reduce mortgage arrears and repossessions.

He says he also wants to create jobs by doubling federal funds for research and training, and he wants industry leaders to match his commitment.

The health of the US people will be another hot topic during the campaign to come. Out of a population of 300 million, more than 45 million, including nine million children, have no form of health insurance, and Mr Obama says he has plans to introduce a nationwide plan that will cover everyone.

Critics, including Mr McCain, have challenged the economics of the plan, which they have described as idealistic, unworkable and unachievable.

One area where Mr Obama could score well against his Republican opponent is on the war in Iraq, in which more than 4,000 US personnel have been killed since the 2003 invasion. He has pledged to begin removing US troops at once and continue until all combat brigades are out within 16 months.

While Mr McCain has declared his misgivings over President Bush's handling of the war, as a Republican he could struggle to distance himself from the administration's policies there.

The bloody battle with Mrs Clinton might also have elevated Mr Obama's standing in the eyes of voters, some analysts believe.

"In adversity has come opportunity," Michael Cohen, of the New America Foundation, said. "(He] has been able to confront difficult questions about his candidacy that would normally arise during the general election."

Dream that died for ambitious first lady and 'co-president'

FROM the surprise win in the New Hampshire primary in January that defied her critics and the pollsters, Hillary Clinton was meant to be the odds-on favourite for the Democratic nomination.

She was the heavyweight who had already commanded an office of her own in the White House versus the "rock star" and political ingenue, Barack Obama.

After months of gruelling jousts, state-by-state, her main rival's popular appeal looked unassailable, although previously Mrs Clinton had defiantly insisted that only she could win the presidency for the Democrats.

The former first lady's quest to be the first woman president of the United States was dashed, however, after she was forced to confront reality: she did not have the support.

Confusion yesterday initially ensued over whether she would throw in the towel formally with a speech in New York – or simply concede that Mr Obama had enough delegates behind him to win the race.

Her aides were swift to stress that the New York senator did not intend to suspend or end her candidacy in a speech last night in New York.

In a formal statement, the campaign made clear the limits: "Senator Clinton will not concede the nomination."

Advisers said she had made a strategic decision to not formally end her campaign, giving her leverage to negotiate with Mr Obama on various matters including a possible vice-presidential nomination for her. She also wants to press him on issues he should focus on in the autumn, such as healthcare.

Mrs Clinton reportedly told colleagues she wanted to take time to determine how to leave the race in a way that would best help Democrats. "I deserve some time to get this right," she said.

Accompanied by her husband Bill, Mrs Clinton had poured millions of her own money into the campaign.

While her main rival is aged 46, Mrs Clinton was faced with criticism over her age – she turned 60 last year – her gender and whether she was personable enough.

As first lady, she had offended sections of Middle America by suggesting she did not go home to "bake cookies".

But publicly at least, the lawyer from a middle-class Chicago suburb had appeared to give way to the ambitions to her husband, a Rhodes scholar from a single-parent household in rural Arkansas. According to Her Way, a Clinton biography by Jeff Gerth and Don Van Natta jnr, this was because the couple had a "secret pact of ambition" – a 20-year plan to make each of them president. That claim is denied by the Clintons.

During Mr Clinton's time in the White House, presidential aides said they effectively saw her as "co-president".

She was even given an office in the West Wing, from which sprang ambitious, but ill-fated, plans to reform healthcare.

But by the time of her husband's second term, Mrs Clinton took a back seat and engaged in projects such as promoting women's rights.

Given the scale of her ambition, it was perhaps unsurprising that she refused to relent, even when the facts were staring her in the face and she risked splintering her party.

The final intense laps also became increasingly acrimonious. While Mr Obama appeared to offer an olive branch, inviting Mrs Clinton to meet "once the dust has settled", her husband seemed to ratchet up tension.

But bowing out of the race is also a financial necessity. Despite Mr Clinton still securing six-figure sums for his public-speaking engagements, her campaign was 4.8 million in debt at the end of April.

The Clinton family's presidential dream may not yet be over, however. Some believe the couple's daughter, Chelsea, is even more astute than her parents – and she has been close enough to learn from their mistakes.

"Chelsea for President" could be the new family motto.

WHAT NEXT?

ONCE Barack Obama is declared the Democratic nominee, focus will switch to the presidential election battle with John McCain.

The Republican nominee, Mr McCain has had two months to plan his campaign and raise funds.

Attention will be on wooing voters in undecided states such as Florida, Michigan and Ohio. Mr Obama and Mr McCain have already begun sparring over issues such as Iraq and national security.

But the Democrats do have one advantage: the race between Mr Obama and Hillary Clinton has encouraged large numbers to register as Democratic voters.