By Gary Robertson
RICHMOND, Va., Nov 5 (Reuters) - Democratic Party insider Terry McAuliffe won the Virginia governor's race on Tuesday by narrowly beating Republican Ken Cuccinelli, a Tea Party favorite who seized on the rocky launch of the U.S. healthcare program to try to keep the contest close.
State election board results showed McAuliffe, a Democratic fundraiser and close friend of former President Bill Clinton, had 48 percent of the vote to 45 percent for Cuccinelli, Virginia's attorney general, with almost all precincts reporting.
McAuliffe squeaked to a win in the Southern state with a strong showing from wealthy, liberal-leaning Washington suburbs. His victory cemented Virginia as a battleground state for both parties ahead of midterm congressional elections next year and the presidential election in 2016.
McAuliffe, who had never held elected office, told cheering supporters in Tysons Corner, a Washington suburb, that the race had never been simply choosing between Democrats and Republicans.
"It was a choice between whether Virginia would continue the mainstream bipartisan tradition that has served us so well over the last decade," he said, his voice hoarse.
Record amounts of outside money flowed into the campaign as McAuliffe heavily outspent Cuccinelli and national Democratic figures attempted to make the vote a referendum on the Tea Party, a small-government wing of the Republican Party.
Trailing in polls, Cuccinelli, 45, attacked President Barack Obama's signature healthcare program, which has been plagued with technical difficulties since its Oct. 1 launch, and narrowed McAuliffe's lead. McAuliffe supports the law known as Obamacare.
A CNN exit poll showed that 53 percent of Virginia voters opposed Obamacare, including four in five of those casting ballots for Cuccinelli.
In his concession speech, Cuccinelli said of the healthcare plan, "We were lied to by our own government in an effort to restrict our liberties."
McAuliffe, 56, tied Cuccinelli to last month's federal government shutdown, blamed by most Americans on Republicans and especially the Tea Party. Virginia was hit hard by the shutdown since it relies more than most states on federal paychecks and contracts.
Cuccinelli also was hurt by a scandal involving Virginia's Republican governor, Bob McDonnell, who is under investigation for taking gifts from a businessman. Cuccinelli apologized in September for taking gifts from the same businessman.
Under state law, McDonnell could not run for a second consecutive term.
"All the things that could go wrong for the Republicans did go wrong. What was striking was how close it was with all the headwinds the Republicans had," said Stephen Farnsworth, a pollster and political analyst at the University of Mary Washington in Fredericksburg.
Libertarian Robert Sarvis got 7 percent of the vote, the best showing by a third-party candidate in the state since 1965.
McAuliffe, who has said he has 18,632 names on his Rolodex, raised about $34 million to Cuccinelli's $20 million, according to the money-tracking Virginia Public Access Project.
McAuliffe outspent Cuccinelli 10-to-1 on television advertising in the final weeks of the campaign, the Access Project said.
Underscoring the national interest in the race, about 70 percent of the money raised came from outside the state. That is by far the highest percentage ever for any U.S. gubernatorial race, according to the nonpartisan National Institute on Money in State Politics, in Helena, Montana.
In the race for lieutenant governor, Democrat Ralph Northam, a 54-year-old state senator from Norfolk, easily defeated Republican E.W. Jackson, a 61-year-old minister from Chesapeake.
Conservative Republican state Senator Mark Obenshain beat Democratic state Senator Mark Herring for attorney general.