The President is likely to win by a significant margin in the electoral college, but at the moment is trailing in the popular vote. That could change when west coast votes are counted.

LIVE: Obama wins US election

At 11.19pm on the east coast, lights on the Empire State building went blue, the colour of the Democrats, and the crowd at the McCormick Centre in Chicago, where a huge Obama rally was being held, exploded with joy.

Martha Nunez, 53, of the Bronx, reacts to positive predictions for President Barack Obama as crowds watch election results in Times Square in New York. Photo: AP/John Minchillo

An hour earlier, cheers had broken out at the President's rally when news came in that Mr Obama had just won New Mexico and Iowa. The win in Iowa was further evidence that his so-called mid-western "firewall" had held.

Meanwhile he was ahead in Florida, Ohio and Virginia, all but making his victory a certainty.

The fight in Florida was even closer than people expected – at one point 7 million votes had been counted and Mr Romney led by just 636 votes – but in the end Mr Obama pulled ahead.

And the race in Virginia – the state Mr Obama won for the Democrats in 2008 for the first time in a generation – remained stubbornly tight.

Voters in the rural south stuck with the Republicans, the government workers spilling from DC into the state's north voted for Mr Obama.

Word leaked in the early evening that internal Republican polling had signalled days ago that Mr Romney was behind five points in Ohio. This solved one of the mysteries of the election – why in the dying days of the campaign Mr Romney had started targeting Pennsylvania. Without Ohio the Republicans needed Pennsylvania, as well as Florida and Virginia.

By about 9pm eastern time the networks started calling Pennsylvania for the President and things started looking grim at Mr Romney's Boston headquarters.

The President won with a disciplined and ruthless campaign. As Mitt Romney spent his time and treasure fighting off stubborn nomination contenders during the northern Spring and Summer the Obama campaign quietly built its war-chest and its network of volunteers across the nation.

When Mr Romney finally won the primaries, the President's Chicago campaign headquarters unleashed a torrent of negative advertising, first casting him as a plutocrat who stashed funds in offshore accounts, then as a corporate raider who had built his fortune by flipping companies and offshoring jobs.

The Romney campaign was stuck on the defensive for weeks. Once upon a time Mr Romney had planned to campaign on his key achievement as Massachusetts's governor – healthcare reform. Then he planned to run on his credentials as a businessman, so the Democrats sought to poison that well too.

And it worked for a long time. Only when Mr Romney demolished the President in the first debate did things turn around for him. The arch conservative who had campaigned on the right to win his base suddenly turned into moderate Mitt, and rather than being punished for it he jumped ahead of the President in the polls for the first time.

The right of the party, which might once have been appalled at hearing such lines like "we can't kill our way out of this mess" in regards to the war on terrorism, was drawn to him – at least he was beating the President.

But rather than veering off course, the Obama campaign stuck to the strategy constructed by campaign manager Jim Messina, and with the President's better performances in the remaining two debates and Democrat's expert on-the-ground network, they slowly reeled in Mr Romney's lead.

By Sunday night no significant poll found that Mr Obama had a statistically significant lead over Mr Romney in the key states, but most found the margin of error was in his favour.

Lawyers circled in Florida and Ohio.

The loss is expected to provoke an ugly blood-letting in the Republican Party.

The party's active Tea Party base and its DC establishment are unified in one thing – the belief that they should have been able to defeat a President whose record included 43 long months with unemployment above 8 per cent and an unpopular healthcare reform, a president who provoked a visceral, unifying dislike among Republicans.

Signs the Republican confidence was cracking appeared over the weekend when Karl Rove – who once served as White House deputy chief of staff to George W Bush, and who founded two of the largest independent conservative fund raising machines – blamed the superstorm Sandy for disctracting attention from the Republican campaign and giving the President a platform.

The battle lines between those who say the party became too moderate and those who believe it is too radical are already drawn.

"If I hear anybody say it was because Romney wasn't conservative enough I'm going to go nuts. We're not losing 95 per cent of African-Americans and two-thirds of Hispanics and voters under 30 because we're not being hard-ass enough, " the Republican senator Lindsey Graham told Politico, last week.

It is not yet clear which Republican Party will emerge dominant, though its only remaining leader is the House Majority Leader, John Boehner, who at least managed to maintain Republican dominance even as Tea Party candidates lost winnable Senate seats.