VIDEO: Watch the debate

HEMPSTEAD, New York (Reuters) - Republican John McCain and Democrat Barack Obama battled fiercely on Wednesday in their liveliest and most contentious debate, with McCain attacking Obama's tax plan, campaign tone and relationship with a former 1960s radical.

The presidential rivals complained about the negative approach of each other's campaigns during a tense and frequently testy debate. McCain said the tone could have been elevated if Obama had agreed to his request for a series of town hall meetings.

McCain also called on Obama to explain his relationship with former 1960s radical William Ayers, who Obama served on a community board with in Chicago. Obama said he was simply an acquaintance.

"Mister Ayers is not involved in my campaign," Obama said.

McCain, an Arizona senator, entered the debate under intense pressure to turn in a strong performance that could turn around a presidential race that has shifted decisively in Obama's favor after weeks of economic turmoil and plunging stock markets.

Opinion polls three weeks before the November 4 election show more voters say they trust Obama's leadership on the economy, which has dominated the campaign-trail discussion and dwarfed McCain's expertise in foreign and military policy.

McCain rebuked Obama for frequently claiming that he is too close to the policies of President George W. Bush.

"Senator Obama, I am not President Bush. If you wanted to run against President Bush you should have run four years ago," McCain said.

Obama said he sometimes had trouble spotting the difference.

"If I occasionally mistaken your policies for George Bush's policies, it's because on the core economic issues that matter to the American people, on tax policy, on energy policy, on spending priorities you have been a vigorous supporter of President Bush," Obama said.

JOE THE PLUMBER

The candidates fought over their tax plans and promised to help working Americans like "Joe the plumber." McCain criticized Obama's proposal to raise taxes on Americans who make more than $250,000 a year, saying it would hurt small business owners like a plumber named Joe who Obama met on the campaign trail.

"Why would you want to raise anybody's taxes right now?" McCain asked Obama. "We need to encourage businesses."

Obama said his plan would cut taxes for 95 percent of Americans and raise them on only a small slice of the most high-income Americans, while McCain would give tax breaks to oil and gas companies.

"We both want to cut taxes," Obama, an Illinois senator, said in their third and final White House debate at Hofstra University. "The difference is who we want to cut taxes for."

Several recent opinion polls have shown McCain's attacks on Obama's character have largely backfired, increasing unfavorable opinions about McCain among voters looking for solutions on the economy.

But the two candidates spent long stretches battling over the grievances about their campaigns and not discussing the economy.

The debate focused on domestic policy and the economy. Obama and McCain were seated at a table with moderator Bob Schieffer of CBS News instead of standing at podiums as in the first debate.

Photo Copyright Getty Images

Copyright 2008 Reuters. click for restrictions