UPDATE 2-US Republican Senate chances dealt blow in Delaware
* Tea Party upstart wins in Delaware
* Result risks Republican hopes to regain Senate (Adds details, New York results)
WASHINGTON, Sept 14 (Reuters) - A conservative "Tea Party" favorite knocked off the establishment choice in Delaware's Republican Senate primary on Tuesday, dealing a blow to the party's chances to recapture the U.S. Senate in November.
Upstart Republican candidate Christine O'Donnell scored the biggest in a string of Tea Party upsets this year over nine-term Representative Michael Castle, a popular former governor and one of the last Republican moderates in Congress.
The loss by Castle, who had been expected to cruise to victory in Delaware's Nov. 2 election, gave Democrats new hope in the state and bolstered their chances to retain control of the Senate.
National and state Republicans had weighed in heavily in recent weeks to help Castle, worried O'Donnell could not win the November race for the Democratic Senate seat long held by Vice President Joe Biden.
"The people of Delaware have spoken. No more politics as usual," O'Donnell told supporters at a victory rally. "The cause is restoring America."
Castle is the eighth Senate candidate supported by the national Republican campaign committee to lose a primary this year and the result was perhaps the biggest display yet of anti-Washington anger.
The string of victories by Tea Party candidates was fueled by broad voter dissatisfaction with President Barack Obama and government in Washington, and left Republicans in turmoil.
"Delaware Republicans chose an ultra-rightwing extremist who is out of step with Delaware values," said Democratic Senator Robert Menendez, who leads the party's campaign committee.
The Republican Senate campaign committee issued a terse one-sentence statement of congratulations on O'Donnell's win. O'Donnell shrugged off the likelihood the committee would not spend any money on her.
"They don't have a winning track record this season," she told CNN.
FINAL PRIMARY DAY
The contest in Delaware highlighted the final day of primaries before November, with voters in seven states choosing nominees for the Senate, House of Representatives and governor's races.
In New Hampshire, former state attorney general Kelly Ayotte trailed in early results against a Tea Party-backed lawyer who had been endorsed by former Republican vice presidential candidate Sarah Palin, who also endorsed O'Donnell.
The Tea Party movement won another high-profile race in New York, where political newcomer Carl Paladino easily beat the establishment choice, former U.S. Representative Rick Lazio, the state's gubernatorial primary.
Paladino, who pledges to spend up to $10 million of his own money, will be a huge underdog in the November race against Democrat Andrew Cuomo.
Republicans are threatening to turn voter worries about the economy and Obama's leadership into big gains in November that could give them control of the House and perhaps even the Senate, once considered a longshot.
Republicans must pick up 10 Democratic seats to reclaim the Senate, and Delaware was once considered to be safely in the Republican column with Castle as the candidate. Without Castle, Democrat Chris Coons, a county executive, becomes at least a slight favorite in November.
The Delaware primary fight had gained new urgency after last month's upset of Republican Senator Lisa Murkowski of Alaska hammered home the point that no incumbent was safe in a year when seven had lost congressional primaries.
Democrats hope the Republicans' shift to the right and the nomination of outsider candidates in Nevada, Kentucky, Colorado and elsewhere will help them in November by alienating moderates and energizing Democrats in those crucial races. Polls show tight Senate races in all those states.
Senate Democratic leader Harry Reid, considered politically dead earlier in the year, is in essentially a dead heat with Tea Party-favorite Sharron Angle in Nevada, according to a Reuters/Ipsos poll on Tuesday. [ID:nN14265218]
The rise of the Tea Party generated high Republican turnout in the primaries and created a broad advantage for Republicans in enthusiasm about voting, which Democrats fear could crimp their turnout. (Additional reporting by Basil Katz; Editing by Christopher Wilson and Bill Trott)