'It's voter registration, stupid' – the fight moves South

Small-town Virginia, once a backwater, has become a vital battleground. By Rupert Cornwell

Last week was one Barack Obama will want to forget: more Sarah Palin, more depressing polls, and a deepening fear in the pit of Democrat stomachs that somehow they're going to blow yet another presidential election. But as the campaign enters its final stretch, everything is still to play for across the handful of swing states that will decide the outcome – not least here in deepest Virginia.

Since the Republican convention and the triumphant unveiling of the lady from Alaska, everything has gone John McCain's way. To be sure, Palin is a divisive figure. "To be honest, I can't stand her," one Obama supporter here said last week. But not only has she electrified the Republican base, in her persona as a no-nonsense all-American housewife, she has given her party a new lease of life among women voters. And as the fact-twisting Republican juggernaut rolls on, the Obama campaign, seemingly wanting to play by a nobler set of rules, appears incapable of hitting back.

But Democrats here have a different perspective. Though the national party may shudder at the sudden prospect of defeat, in Virginia – the newest and most important addition to the list of battleground states – it's not a matter of losing. It's a chance of victory in a place where Republicans have won since 1964.

Not for a century before that has Danville been the centre of such political attention – to be precise, since a traumatic week in April 1865 when the town was the last, brief, home of the Confederate government. As fleeing Union troops closing in on his capital, Richmond, Jefferson Davis briefly moved into the gorgeous Italianate mansion of Danville's leading citizen, the pioneering tobacco baron William Sutherlin, from where he issued his last presidential proclamation.

Today the building still stands, lovingly preserved as Danville's Museum of Fine Arts and History – which is more than can be said for the industries on which the town's wealth was built. Many of the old tobacco warehouses are closed, while Dan River Inc, the textile firm that was its largest employer, went bankrupt two years ago and was sold to a buyer from India. Its main building, said to have been the largest single-unit textile mill in the world, is now being carefully demolished into piles of weathered bricks and old timber, to be remodelled into high-end homes.

Demographically, too, the town isn't exactly booming. Over the past decade the town's population has fallen from 48,000 to 45,000. Almost half are black, and thus a reservoir of support for Obama. Even so, Danville sits at the southern end of a congressional district that is usually rock-solid Republican.

But just possibly the political maths will be turned upside-down in 2008, and with it the destination of Virginia's 13 electoral college votes. Democrats have not carried the state since Lyndon Johnson's landslide win over Barry Goldwater. But in 2000 and 2004, Al Gore and John Kerry kept George W Bush's victory margin to 8 per cent, while Democrats have won the last three statewide elections (two for governor and one for the US Senate), largely thanks to the fast-growing Washington suburbs in north-eastern Virginia. If Obama can consolidate these gains and hold down the Republican margin of victory in the rural and southern part of the state, he can win.

Thus it was that last month, not a defeated rebel president but an aspiring president paid an unheard-of visit to Danville. Obama was in town not for a week but for barely half an hour, dropping in at Short Sugar's Bar-B-Q (All You Can Eat Ribs $10.99, Friday and Saturday) on busy Route 58 on the northern edge of town. The diner is still recovering from the excitement. Far more important, however, the Obama campaign has opened the first local office by a Democratic candidate in decades.

The move might seem pointless. This part of the world, after all, is solid Republican territory, unmistakably southern in its culture. But it makes strategic sense. "If he can escape with, say, a 60/40 loss down here, Obama can carry Virginia," says a local observer. Only a few of those extra votes will be converts. The rest must be gained by persuading people to vote Democrat who've never voted before. In Virginia – not to mention Ohio, Pennsylvania, Colorado and the other states the Democrats need, in some combination, to recapture the presidency – turnout and voter registration are the name of the game.

The Danville office ("Campaign for Change") opened two months ago. Since then workers for Obama and Tom Perriello, the Democrats' long-shot challenger for the congressional seat, have set up outside stores and gone house-to-house knocking on doors to rustle up new voters – and make sure that people who think they are registered under Virginia's complex regulations truly are.

The Obama people have focused on African Americans, the Perriello campaign on students. The best guess is that the effort has netted 15,000 potential new voters, no small number in a single congressional district. That may not be enough for Perriello. But it's a big step towards the 150,000 the Democrats need to bring on to the electoral rolls across the state if they're going to break their 44-year losing streak.

In Virginia, as elsewhere, the tide has been running against Obama since the Republican convention and Palin's bombshell arrival on the national stage. Polls suggest that here, too, McCain has now got his nose in front. "It's going to be tough," admits Rachel Klarman, an aide of Perriello, "but if we keep working we can do it."

Republicans feel exactly the same. "We're crazy, but we're not stupid," jokes Mack Stewart, a Republican activist, asked whether Virginians will break their post-LBJ habit. Like many social conservatives, Stewart "was never really a McCain person" and voted for Mitt Romney, the former Massachusetts governor, in the primaries. Now he sports a McCain badge. "Palin has really made a difference," he says, "but the race here will be close. It will depend on turnout."

As Bill Clinton might have said, it's voter registration, stupid. That was one reason for Obama's upset victory over Hillary Clinton in the primaries, as he drew students and blacks who had never voted before into the political process. To defeat McCain he must pull off the same trick again – and he yet may. By the end of last week, the signs nationally were that the pendulum might be swinging again. Palin's husband, Todd, has been subpoenaed in the burgeoning "Troopergate" scandal in Alaska and she herself betrayed an alarming shakiness on foreign affairs in her ABC TV interview, while criticism for misleading ads is raining on McCain's head, not least from women.

Danville, meanwhile, basks in its new importance. Belatedly, the McCain campaign has opened a local office as well. Kevin Ainsworth, the manager of Short Sugar's Bar-B-Q, might be a Republican, "but the Obama visit has been great for business", he says. "We're trying to get McCain here, and his people have said he'll come if he's in the area." If the race in battleground Virginia stays close, he may just do so.