With Clinton all but finished, Obama is now looking ahead to a showdown with John McCain and is busy trying to cast off the elitist tag

By a twist of fate, the 45th anniversary of Martin Luther King's "I have a dream" speech falls on the day the Democratic presidential nominee is to deliver the acceptance speech at the party convention at the end of August.

The slain civil rights leader foretold that America would live out the true meaning of its creed that "all men are created equal". Barack Obama will be the first African-American to reach the White House if he can dispense with John McCain, the Republican candidate, as effectively as he appears to have dispatched Hillary Clinton.

"It's like the fulfilment of a prophecy," said Loretta Augustine-Herron, 65, an old friend from the Illinois senator's days as a community organiser alongside her in Chicago. "He will be the people's president.

His whole life is about 'we' - 'We the people'," she added, in a reference to the preamble to the American constitution.

History seems to have turned its back on Clinton, who had hoped to be the first female president, as she stumbles towards the end of her campaign. It would take some nerve to smash the dream on the anniversary of King's speech by somehow swinging what she called "hard-working Americans, white Americans" last week behind her in defiance of black voters.

For disheartened members of her inner circle, and possibly Clinton herself, all that remains is to negotiate the terms of her surrender while Obama turns his attention to the duel with McCain, the 71-year-old Arizona senator and Vietnam war hero.

"McCain has had a holiday while we've gone through a few rough weeks, but we keep defying the odds," said Betsy Myers, Obama's chief operating officer. "We forget that fewer than 10% of people knew Obama's name when this campaign started 16 months ago."

The general election is shaping up to be a clash between two politicians who claim to be able to cross party lines and reach independent swing voters and moderates from both parties. In an effort to break the spell, Obama is already describing a McCain presidency as "George Bush's third term" on the Iraq war and the economy and attacking him for supporting tax cuts that he had previously opposed.

Myers forecasted that McCain's "authenticity", previously an indisputable character trait, will come under scrutiny. "What I'm hearing is that he has changed his views and gone to the right in order to win the nomination, so how authentic is he?" Myers said. "Barack hasn't pandered to his party. He stays steady and calm and doesn't flip-flop on the issues."

She also predicted that a series of Republican defectors to Obama would reinforce his claim to attract bipartisan support. Obama has already said he may appoint cross-party figures such as Chuck Hagel, the Republican senator and critic of the Iraq war, to his cabinet. "It will be interesting to see who comes our way," Myers said.

The embattled Clinton has not given up publicly after losing the North Carolina primary and winning Indiana by a wafer last week. She is taking her fight to West Virginia, a bastion of white, rural, low-income voters, this Tuesday and hopes to struggle on until June 3, the date of the last contests, in Montana and South Dakota.

Bill Clinton, her husband and closest adviser, insisted: "We're going to roll through this thing", despite the air of defeat that clung to him as the results came through on primary night.

All the while, Clinton's campaign - thought to be more than $20m in debt - is bleeding money and superdelegates, the party leaders whose vote will ultimately determine the nomination at the party convention. Obama has now surpassed her in the number of pledged delegates and superdelegates and states won as well as in the popular vote.

He is preparing to declare victory on May 20, when Bible-belt Kentucky (her territory) and latte-sipping Oregon (his) go to the polls. By then he should have reached the magic figure of 1,627 out of 3,253 pledged delegates, giving him more than half the total number available.

"We can make a pretty strong claim that we've got the most runs, it's the ninth inning and we've won," Obama said, using a baseball metaphor. His team expects a new wave of superdelegates to follow, and private conversations are already under way with some of Clinton's national and local organisers about hiring them for the general election.

Clinton's supporters indicate that she may be willing to withdraw from the race in return for help in settling some of her campaign debts - she has personally lent more than $11m - and negotiating a way to count the disputed votes of Michigan and Florida, which were disqualified by the party for holding their primary elections early.

Intriguingly, she may also be seeking a new way to earn her place in history. She may hold out for a promise that she would be the lead sponsor of a universal healthcare reform bill in the Senate under his presidency.

Obama hinted this weekend that he is open to talks. "I'd want to have a broad-ranging discussion with Senator Clinton about how I could make her feel good about the process and have her on the team moving forward," he said.

The party is watching warily to see whether Clinton will be a graceful loser. Her political future as well as her husband's legacy may depend on her willingness to stop the attacks and throw herself unreservedly into the campaign for Obama.

The notion that she could become Senate majority leader, often mentioned as the ideal fall-back role for her, was challenged last week by Carl Bernstein, her biographer. "She doesn't want to go back to the Senate. She wouldn't be the majority leader because quite frankly a lot of the Democratic senators don't like her enough," he said.

Friends believe Obama is unlikely to offer his rival the vice-presidential slot, even though some intermediaries are putting out feelers about a "unity ticket". Senator Edward Kennedy said woundingly it would be better to give consideration to somebody who was "in tune with his appeal for the nobler aspirations of the American people".

Abner Mikva, 82, one of Obama's closest political mentors in Chicago, served as Bill Clinton's legal counsel in the White House in the 1990s and knows the former president and his wife well. His connections with Obama and his wife, Michelle, date back even farther to when they were both young, Ivy-League-educated lawyers at his Chicago firm.

"Having Hillary on the ticket would involve too much back-pedalling for Barack," he said. "It would be difficult to talk about changing Washington while accepting all the old-style baggage that she has."

Mikva believes the Clintons are bewildered by the realisation that "this punk kid from Chicago" is poised to deprive them of their triumphant return to the White House. The former president was fighting on, he said, because "he really feels that it shouldn't be happening, and that he ought to be able to fix it".

He recalled how Bill Clinton came to Chicago to meet local party leaders on the eve of Hillary's presidential campaign. "He talked about her nomination as if it was a done deal. The other candidates were just extras to be knocked over."

The Republicans, he warned, may be about to make the same mistake with Obama by gloating over his alleged weaknesses.

The "windy city" has provided a turbulent backdrop to Obama's campaign, from the inflammatory comments about "God damn America" by Reverend Jeremiah Wright, his pastor for 20 years at Trinity United Church, to the patronage of Antoin Rezko, a shady Syrian-born fixer who helped Obama to buy his home and is on trial for bribing local politicians.

Wright's successor at the church, Reverend Otis Moss, described by Obama as a "wonderful young pastor", is now coming under attack for praising "ghetto prophets who preach a brand of thug theology", such as Tupac Shakur, the murdered "gangsta" rap star.

The scrutiny has enabled the Republicans to begin defining Obama as an unpatriotic leftwinger with a far murkier past than his postpartisan, postracial image suggests. It did not help when, perhaps overcome by tiredness, he suggested in a speech last week that he wanted to be president of all "57" American states, when there are only 50.

Peter Wehner, a former White House aide to President George W Bush, thinks the drip-feed of revelations has stripped Obama of his early promise, although he is still a "formidable" opponent.

"He is no longer St Obama. There is a gap between how he presents himself and who he is," Wehner said. "His personality inoculates him to some extent against his greatest weaknesses but he is a conventional, completely orthodox liberal."

The electoral demographics that served Clinton so well with Reagan Democrats - blue-collar swing voters - could work just as well for McCain.

It is no accident that Obama spoke on the night of his victory in North Carolina about his humble, heart-of-America roots as the grandson of a second world war GI and son of a single mother who received food stamps.

Augustine-Herron believes Obama demonstrated 20 years ago in Chicago that he had the ability to transcend class and racial divisions when he began work as a community organiser in the 1980s. "We were the working poor," she said. "A lot of the men in our communities lost their jobs in the steel mills and people were losing their homes." She added: "I don't understand this elitist garbage, because the man has sat down at my kitchen table many times."

There is some concern in Obama's camp that Michelle remains vulnerable to conservative attacks after she said she was proud of her country "for the first time" during his campaign.

Friends are advising her to be careful not to sound too angry. "That's something she may have to work on," said Mikva. "She has a lot of people skills but she could soften her image. She knows that, and she can do it."

Obama's campaign hopes to overwhelm McCain's potential advantage with white blue-collar workers by swamping the electorate with new voters. A registration drive to pull in more than 1m new Democrats was launched this weekend.

"The good news about this prolonged primary season is that we have had the privilege of organising in every state," said Myers. "As people start to tune in and really take a look at Barack Obama, they come our way."

Republicans concede that the political terrain is favourable to Obama this year. "He will go way up in the polls, there will be a fair amount of despair among Republicans, and the Democrats will have a fabulous convention and go into the fall in the lead, but gravity will then reassert itself," Wehner predicted. "He hasn't run anything. He hasn't been a governor. He hasn't had any real achievements."

Obama's friends believe he is more thoughtful than his rival. "John McCain's stance comes down to: 'I don't know much about the economy, but vote for me anyway,' or: 'I don't know how to end the war in Iraq so maybe we will stay there for 100 years'," said Mikva.

Mikva has already taken to calling his protege Mr President, like some of the members of Congress who mobbed Obama when he visited the Capitol on Thursday. One starstruck congresswoman, a superdelegate who had already endorsed Clinton, asked Obama to autograph the front page of a newspaper with the headline "It's my party". If it isn't already, it will be soon.

By Sarah Baxter, The Sunday Times, May 11, 2008