It certainly had the look of a revolution. Across the country, Republican stalwarts were kicked out of office. States that had not voted Democrat in a generation turned blue. In city after city, tens of thousands of people took to the streets. At the gates of the White House, a crowd gathered and shouted: 'Obama! Obama!'

Now, as America faces up to the fact that Barack Obama will be its next president, many are wondering at the scale of the political changes that his remarkable campaign has wrought. Some are talking of a second New Deal. They see an opportunity for the Democrats to transform America. They plot a Democratic dominance of US politics for at least a decade. It truly is out with the old and in with the new.

The cold numbers seem to back that argument. Obama has become the first Democrat since 1976 to win with more than 50 per cent of the vote. He returned the Democrats to power in the Deep South, the Midwest and the Rocky Mountains. The Democrats are a party of the whole country again. The Republicans look like a rump.

During the campaign, the Republican attack machine called him a Marxist and a socialist. He was a tax-and-spend Democrat; he was the most liberal politician in the Senate; he was a dangerous radical. And yet Americans voted for him. Not only that, they turned out in huge numbers and queued for hours to elect the first black President. 'This is a fundamental change. It was totally unpredictable, even just a year ago,' said David Peritz, a political scientist at Sarah Lawrence College in New York.

That has liberal America licking its lips. Obama ran on a one-word slogan - change - and it is change his supporters want. Some activists see a chance to transform America in the way Franklin Roosevelt did. By controlling all the levers of government, Obama can reshape a nation and the Republicans can do little to stop to it. It seems a beguiling vision. But is it real?

The history of the left in America has not been a happy one. The country often seems to have an innate conservatism that the desires of left-wing politicians have too often come to grief on. Yet Obama has already begun the task of preparing to govern. He is assembling his team and setting out his goals. The hype and dreams of the campaign trail are over. America wants to know if the Obama revolution is the genuine article. Soon it will find out.

Sometimes the most telling moments of a campaign come in the forgotten details. Back in January Obama met editors from a Nevada newspaper, the Reno Gazette-Journal. Obama surprised them by praising former President Ronald Reagan, not for his policies but for his ability to change America. 'He put us on a fundamentally different path because the country was ready for it,' Obama said. The comments caused a brief kerfuffle. Hillary Clinton attacked Obama as praising Reagan's right-wing legacy. Then it faded from view.

Until now. In the wake of his election win last week, those remarks can be seen in a new light. Many Democrats are hoping that Obama can be a left-wing version of Reagan. He can change America for a generation. Reaganism, after all, dominated American political life from 1980 to last week. Every politician after him, including Bill Clinton, had to run on the pro-business, tax-cutting, hawkish, anti-government playing field that Reagan created. Now many liberals say Obama has the mandate to do the same thing. But in reverse. 'There is a lot of talk in Washington about the end of the Reagan era,' said John Fortier, a research fellow at the conservative American Enterprise Institute.

Obama has built a huge and viable coalition of support. It is made up of college-educated whites, blacks and Hispanics and of young voters. It has propelled the party to pick up swing states such as Ohio, Iowa and Florida. It has turned once red states such as Indiana, Colorado, New Mexico, Nevada, Virginia and North Carolina into blue states. It has seen big gains in both houses of Congress, giving Obama control over government. 'Clearly he has a mandate. The power is there. The question now is when he talks about bringing change, what does he mean?' said David Frum, a leading Republican and former aide to President George W Bush.

That is the question on everyone's mind. On the campaign trail the agenda was ambitious, even potentially transformative. On Iraq, Obama has promised to bring US troops home, perhaps within 16 months. He will talk to leaders of countries such as Iran, Cuba and North Korea. He has promised a massive extension of healthcare. He wants to cut taxes for the middle classes and raise them for the wealthy, reversing the trend of the Bush years.

He wants a massive expansion of green industry and alternative energy. He wants to allow service in the army, schools or overseas to be exchanged into credits to pay for college. And all of the above add up to the most fundamental shift of all: bringing government back into people's lives.

But Obama has something else beside political clout and left-wing ideas. His campaign was no ordinary one. It was a mass movement for the age of technology. Obama's organisation attracted more than 3.1 million internet donors and volunteers. They exist as potential activists in every congressional district in the country, ready to agitate, lobby and campaign for Obama's agenda. It is a force that no other American politician has ever commanded before; an online grassroots army. In an email sent moments before he delivered his victory speech last Tuesday night, Obama told them to prepare. 'We have a lot to do to get our country back on track and I'll be in touch soon about what comes next,' he wrote.

That prospect scares some Americans. Literally. In Madison's Bar in a suburb of Beaumont, Texas, the local Republican party last week watched the Obama victory unfold. Supporters gathered upstairs around televisions carrying live cable coverage. There was widespread dismay. Though Texas remained solidly red, it was clear much of the rest of the country was suddenly on a different course. 'I think he is a socialist. I don't think the people who voted for him know what his real plans are,' said Marilyn Martindale.

It was a common view. As the mood in Madison's became more depressed, the talk was of a change for the worse under Obama. 'How could he get hold of the country? I am afraid our way of life is about to change drastically,' said Sue Harris as Fox News blared out details of the latest Republican loss.

But there are strong signs that the worst Republican fears - and the most ambitious Democratic dreams - are built on shaky foundations. Obama not only faces a potentially toxic economic environment, he himself seems far more of a moderate than a radical. Contrary to the concerns of the Republicans in Texas, many people think Obama is no revolutionary. Nor did the election give him licence to pursue one.

Much of Obama's campaign was based on a solid middle ground. His appeal, from his 2004 convention speech to his 2008 campaign, has always been about unity. He fought the election by defending the constitutional rights of gun owners. He supported the death penalty. He ran on promises of tax cuts. His plans for healthcare were less radical than those of either of his main Democratic rivals, Hillary Clinton or John Edwards. He preached to black men about the importance of taking responsibility for family life. His stump speech was often enthused with religious values.

Indeed Obama wore his Christian faith more openly on the campaign trail than John McCain did. 'I think he is going to proceed aggressively, but not radically,' said Larry Haas, a political commentator and former aide in the Clinton White House.

A look beneath the headline figures of the election also reveals that America has not become a liberal nation over-night. McCain faced an almost impossible environment for a Republican to run in. Yet he still won 46 per cent of the vote. Obama's victories in North Carolina, Indiana, Ohio and Florida were by only a few percentage points.

A recent survey showed that only 22 per cent of Americans identify themselves as liberals. It should not be forgotten that McCain ended the conventions ahead in the polls. It was only after the worst financial crisis since the Great Depression that Obama managed to get a solid lead. His win was no landslide like Roosevelt's when he took 48 states in 1936, or Reagan's 1984 win when he took 49. Indeed, Obama still lost the white vote by 12 points and whites still make up 74 per cent of voters.

'It is not really a tidal wave. It is sort of a mini-earthquake. Though of course, when you are on top of it, a mini-earthquake can still seem quite large,' said Darrell West, a director at the left-of-centre Brookings Institution think-tank.

It is perhaps no surprise that top Democrats - unlike activists on the party's left - are not preaching revolution. 'This government must be from the middle,' said House speaker Nancy Pelosi last week. 'I don't think it's a mandate for the New Deal,' echoed Howard Dean, chairman of the Democratic National Committee. In fact, Obama's ambitions appear limited and will be deeply hamstrung by the brutal economic conditions he will inherit. The long-cherished dream of a healthcare policy is likely to proceed in stages, not one swoop.

'I don't see healthcare happening right away. He's more likely to make incremental changes,' said West. Large government programmes will face tight budgets or spending cuts. American popular opinion also remains largely unmoved. There has been no wholesale embrace of liberal values. Much of the country remains essentially centre-right. Just look at the rejection last week of gay marriage in California.

Nowhere will this be more on display than in foreign policy, despite the worldwide euphoria of last week. 'There is nearly always great continuity in American foreign policy,' said Haas. Last week Obama started getting the same daily intelligence briefings that Bush gets. He will get one every day for the rest of his presidency. It is those that are likely to shape his foreign policy far more than liberal ideals.

Obama may be more open to talk to nations such as Iran, Cuba, Venezuela or North Korea. But America's armed forces will remain stationed around the world. Indeed, when it comes to issues such as Pakistan and Israel, Obama has been at times more hawkish than McCain or Bush. He has spoken of his willingness to use force. Countries which have welcomed Obama's rise are likely to realise quickly that power relations in the world will remain the same. Realpolitik is a game that all American presidents play.

But if Obama's election does not quite represent an American embrace of the left, it does show one thing: a clear rejection of Bush-style Republicanism. In that respect a new era has dawned. The election has in effect cast the Republican party into a political wilderness. Many believe the conservative movement popularised by Reagan has to change or die. 'There has clearly been a massive rejection of Bush's conservatism. It has been the failure of that philosophy,' said John Halpin, a senior fellow at the Centre for American Progress, a liberal think-tank dedicated to improving the lives of Americans through ideas and action.

Last week the Republican party began coping with that rejection. At the weekend retreat in rural Virginia of conservative icon Brent Bozell, founder of the watchdog group Media Research Centre, about 20 leading figures met to discuss their party's future. Guests included anti-tax crusader Grover Norquist and Al Regnery, publisher of the American Spectator. After the talks Bozell gave a conference call where he revealed the meeting's conclusion. 'The moderate wing of the Republican party is dead,' he said. That echoed conservative attacks on party moderates, such as columnists David Brooks and Peggy Noonan, who had criticised the right during the campaign. Some have called for them to leave the party.

That is almost certainly music to Democrat ears. The Democrats, far from launching a left-wing revolution, have captured much of the centre. The Republicans have been reduced to their heartlands. As a result, the Republican party is more right-wing and conservative than the country itself and could move even further to the right. It also faces a bitter battle that will most probably last beyond 2012. 'They will factionalise severely,' said Halpin.

The civil war will pit the party's conservative base, likely to be in the shape of Sarah Palin, against reformers who want to appeal to moderates. It is the same process that the Conservatives in Britain went through after Tony Blair's win in 1997. Or Labour after Margaret Thatcher's 1983 triumph. Republicans are out of touch now with American concerns. Their touchstone issues of abortion and fighting gay marriage arouse passions but no longer win elections.

Obama's capture of the Hispanic vote is also crucial. Bush and his policy guru, Karl Rove, fought hard for that fast-growing demographic. But the collapse of immigration reform at the hand of Republican conservatives ended that. It has left the party distinctly white at a time when minority voters are becoming more numerous and more powerful.

It is hard to plot a quick way back for the Republicans, short of a spectacular mishandling of his presidency by Obama. Frum offered a grim assessment of his party's chances in the next few years. If history serves as any example the conservative base will now seize the party, forcing its 2012 candidates to run on a right-wing platform. Only another presidential defeat will convince the party that its future lies back towards the centre. 'It is possible we can come back for the next presidential election. But to be honest it often takes longer than that,' Frum, the former aide to Bush, said.

But though the politics of it are complex, there was little doubt that genuine change was in the air last week. It could even be felt in the red heartland of Texas. Standing outside a polling booth at a union hall in Beaumont, Claudia Deshotel was clear why she had voted for Obama. 'I just want something different. We need change. Anything has to be better than what we got now,' she said.

She got change. The right has been rejected, even though the left has not been fully embraced. Obama will pick a careful path through the desirable and the possible to take the country on a different road. But there is one area of American politics which has been truly transformed. The campaign of 2008 has put a black man in the White House. The symbolic power of that cannot be reversed. It has broken down a barrier that was seen as insurmountable just a generation ago.

At the same time, Hillary Clinton and then Palin overcame obstacles to women running for the highest office. That too has set America on a fresh path from which there is no turning back. A future flow of minorities and women into both parties is inevitable. In that sense, the campaign of 2008 has created a brave new world.