WASHINGTON (AP) — Republican presidential candidate John McCain conceded battleground Michigan to Democrat Barack Obama on Thursday, a major retreat as he struggles to regain his footing in a campaign increasingly dominated by economic issues.

In another sign of McCain’s woes, his campaign signaled that it would counter Obama’s efforts in Indiana, a state that hasn’t voted for a Democrat since 1964. And, a New Hampshire survey showed the Republican trailing by double digits.

With polls showing Obama leading comfortably, McCain’s campaign confirmed it was pulling staff and advertising out of economically distressed Michigan, and one adviser said it was “off the list.” The GOP nominee also canceled a visit there slated for next week. Michigan, with 17 electoral votes, voted for Democrat John Kerry in 2004, but Republicans had poured money into an effort to try to place it in their column this year.

“Operations will be scaled back,” said Mike DuHaime, the campaign’s political director.

In Indiana, surveys show a competitive race after Obama spent months pouring money into the state and Republicans resisted countering. Now the Republican National Committee is running TV ads to fight for the state’s 11 votes, and McCain senior adviser Greg Strimple said: “We’re going to go there.”

Separately, a Saint Anselm College Institute of Politics poll showed Obama leading McCain 49 percent to 37 percent in New Hampshire, a state Kerry narrowly won four years ago and that McCain is hoping to capture.

The Michigan decision marked the first time either McCain or Obama has tacitly conceded a traditional battleground state in a race for the White House with little more than a month remaining.

Obama said McCain’s struggle in Michigan appeared to be due to his position on the economy. He said voters in the state and across the country will decide the election based on who they believe will get it moving again.

“I think Sen. McCain was in a difficult situation, and continues to be in a difficult situation, because his economic policies just don’t vary very much from the president’s,” Obama said in an interview with the Detroit Free Press during a visit to Michigan on Thursday.

“He can legitimately take credit for breaking with this administration on issues like torture, on ecology and climate change. I do not belittle those things. But when it comes to those things like our core economic agendas, they are fundamentally different because he has essentially duplicated George W. Bush’s economic policies, and that is a tough sell in this environment.”

In a campaign now unfolding across more than a dozen states, the decision means Obama can shift money to other states like Virginia, Colorado and North Carolina where he is trying to eat into traditional Republican territory. McCain’s resources were being sent to Ohio, Wisconsin, Pennsylvania, Florida and other more competitive states, and aides said he would try to put Maine into play as well.

By pulling out of vote-rich Michigan, McCain conceded a large part of the electoral map in the heart of the industrial Midwest.

The move underscored McCain’s troubles on the economy, which he has acknowledged is not his strongest subject, as well as his struggle to beat an opponent who has the money to compete in many states President Bush won four years ago. Polls show Obama has pulled ahead or tied McCain in many of those states.

Obama rejected public financing so he can spend as much as he can raise; McCain’s direct spending is limited to $84 million in taxpayer money. But McCain is getting help from the Republican National Committee, which announced Thursday that it had raised nearly $66 million in September. The Democratic National Committee has not been as big a help for Obama, but his massive fundraising makes him rely less on the party.

As Nov. 4 approaches, both sides are adjusting their strategies daily to find the best state-by-state path to the 270 electoral votes needed for victory.

McCain’s campaign also said it is opening a front in Maine, which Kerry won four years ago and which offers four electoral votes allocated between the statewide winner and the winner in its two congressional districts. The Arizona senator’s campaign checked advertising rates in media markets there this week.

Obama already has abandoned efforts in Alaska, Georgia and North Dakota, but the Democrat has succeeded in making traditional Republican strongholds Indiana, North Carolina and Virginia competitive. Both sides are battling it out in those states, where public polls show Obama ahead or tied.

The two campaigns are squaring off with increasing intensity in Colorado, Ohio, Florida, Iowa, Missouri, Nevada, New Mexico, which Bush won in 2004, and Wisconsin, Pennsylvania and New Hampshire, which went to Kerry.

Obama also is making a limited effort in the traditional GOP bastion of Montana and McCain is going after Democratic-tilting Minnesota.

Said Obama campaign manager David Plouffe: “Their narrow path just got narrower.”

McCain had identified Michigan early on as a potential target, particularly in light of Obama’s troubles with white, working-class voters in other Rust Belt primaries although he skipped Michigan because of a Democratic Party fight over its primary date and didn’t set up a campaign organization there during the primary.

But Michigan posed other difficulties for McCain. It has a Democratic governor and the nation’s highest annual average unemployment rate since 2006. McCain’s 90 percent support in the Senate for the unpopular Bush, a theme hammered by Obama, proved too much for the GOP nominee to overcome.

Republican strategists said those troubles became more acute for McCain in Michigan after the Wall Street collapse, and both public and private polls showed him sliding. On Wednesday night, the campaign decided that the $1 million a week it was spending in Michigan wasn’t worth it with internal polls showing Obama approaching a double-digit lead.

“It’s been the worst state of all the states that are in play and it’s an obvious one, from my perspective, to come off the list,” Strimple said.

Word of McCain’s pull out came as the vice presidential candidates, Republican Sarah Palin and Democrat Joe Biden, prepared for an evening debate in St. Louis and just before Obama took the stage for a rally at Michigan State University, his third event in the state in five days.

McCain’s decision didn’t go over well with at least some Michigan Republicans.

“We want him in Michigan. We want him to hear our issues,” said Mike Bishop, the top-ranking Republican in the state Legislature.

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