Pat Dollard

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NEW YORK, Sept 20 (Reuters) – Embattled New York Governor David Paterson said on Sunday he was still running for office, in the face of reports that President Barack Obama had asked him to withdraw from the 2010 race for fear that he cannot regroup from a series of political setbacks.

“I am running for office,” Paterson told reporters at a Manhattan parade. “I’m not going to discuss confidential conversations,” he said, adding that he planned to continue focusing on matters related to the financial crisis.

The New York Times reported on Sunday that the Obama administration is worried Paterson’s unpopularity could drag down New York’s Democratic members of Congress and the Democratic-controlled state legislature in November 2010 elections.

Citing an administration official, the Times reported that Obama’s request that Paterson step aside was put forward by his political advisers, but approved by the president.

The newspaper quoted another administration official as saying: “Is there concern about the situation in New York? Absolutely.” That official said the concern had “been conveyed to the governor.”

A “New York Democratic operative with direct knowledge of the situation” also confirmed the request had been put forward, the newspaper said, adding that the operative described Paterson as being “resistant” to the idea.

All of the newspaper’s sources spoke on condition of anonymity.

Paterson, who as lieutenant governor assumed leadership of the state government last year after Governor Eliot Spitzer stepped down in a sex scandal, has seen his approval rating in polls plummet for months after a series of political setbacks.

The state Senate was gridlocked for nearly five weeks during June and July as Republicans and Democrats fought for control. The global financial crisis has hit New York hard, and the state has struggled with budget shortfalls.

Obama’s unusual request that Paterson not seek to remain in office — an especially sensitive one given that he is the nation’s first black president and Paterson is one of only two black U.S. governors — was conveyed by U.S. Representative Gregory Meeks, who is close to the administration, the Times said.

Meeks could not be reached for comment, the Times said.