(Adds comment from Bloomberg, reaction)
By Edith Honan
NEW YORK, Oct 23 (Reuters) - Mayor Michael Bloomberg won the right to seek re-election as New York's City Council voted on Thursday to extend the two-term limit for elected officials as the city grapples with the global financial crisis.
Bloomberg, a former Wall Street trader and self-made billionaire who was elected in 2001 and in 2005, wants to run again on grounds that his financial experience will be valuable in guiding the city through lean fiscal times ahead.
The 51-member council voted 29-22 to approve the measure. About two-thirds of the council would have been forced out of office under the two-term limit, but they can now run for a third term in the November 2009 election.
Bloomberg welcomed the decision as the "the right choice."
"Those of us who work on both sides of City Hall must now move forward with the important decisions that face us, particularly finding ways to soften the fallout from the economic downturn and balancing our budget as revenues decline," Bloomberg said in a statement.
"We have a lot of work to do together to get New York through these tough times," said Bloomberg, a longtime Democrat who was elected mayor as a Republican but is now an independent.
In 1993 and 1996, New Yorkers voted to limit the mayor and other city officials to two four-year terms. A Quinnipiac University poll on Tuesday found 89 percent of voters say a referendum, not a council vote, should decide the issue.
Council Speaker Christine Quinn told the council that New Yorkers could express any disagreement with the council's decision at next year's election by not voting for Bloomberg or other members seeking a third term.
"In a time like this what you need is New Yorkers to have the opportunity to have consistent leadership," she said.
A court challenge by two council members -- represented by Randy Mastro, who served as deputy mayor under Bloomberg's predecessor, Rudy Giuliani -- failed on Wednesday to stop the vote. Bloomberg and Quinn rejected holding a referendum on the issue and an amendment proposed on Thursday calling for a referendum was not passed by the council.
Ten New York taxpayers immediately sued the council, Bloomberg and individual council members in Manhattan federal court, saying their civil right to vote in a referendum on the issue was violated by the council's action on term limits.
Several council members also pledged to challenge the term limit extension in court.
Democratic Congressman Anthony Weiner has pledged to run against Bloomberg in the 2009 election and said the term limit extension was "a sad day for New York's democracy."
"Everyone can see that this is a back-room, insider deal that takes away New Yorkers' right to vote. I don't believe it will be forgotten," Weiner told reporters after the vote.
Comptroller Bill Thompson, also a candidate for mayor in 2009, called the vote "an affront to New Yorkers."
"I am saddened that our mayor and majority of city council members have put individuals before principles. Today our government chose to empower itself rather than the people it serves," he said in a statement.
Giuliani sought to stay on as mayor when his second term was ending in 2001 after the Sept. 11 attacks. But his proposal proved unpopular and he backed down. (Editing by Michelle Nichols and Peter Cooney)