With little fanfare, President George W Bush took the first step in his race for a second term on Friday by filing legal documents that will allow him to raise campaign money and organise his re-election bid.

Bush, hailed by Americans for leading the war on terrorism but facing questions about his stewardship of the US economy, hopes to use the power of incumbency to portray himself as above the political fray, while a group of nine Democrats battle it out for their party's nomination.

"The American people will decide whether or not I deserve a second term. In the meantime I am focusing my attention today on helping people find work," Bush told reporters as he left the White House for a weekend at Camp David.

Bush will not make a formal announcement speech any time soon, although on Wednesday night he will address the annual President's Dinner that will raise up to $12 million for Republican congressional candidates. The first fund-raiser for the president's re-election campaign will likely be in June.

The creation of 'Bush-Cheney '04 Inc.' was done quietly. An aide filed formal notice of Bush's re-election bid with the Federal Election Committee, including a statement of candidacy and campaign organisation.

This allows Bush to raise and spend money and open a campaign headquarters, which will be established in the Northern Virginia suburbs of Washington, probably Arlington. Letters asking for donations will go out in coming days.

White House political director Karl Rove will run the campaign from the White House and political aide Ken Melhman will become Bush's campaign manager, White House and Republican officials said.

Mercer Reynolds, a Bush loyalist and former ambassador to Switzerland, will be finance chairman and Jack Oliver, deputy chief of the Republican National Committee, his deputy.

Bush is expected to be a formidable candidate, as most Americans have supported his response to the September 11, 2001, attacks and the war he waged on Iraq, but Democrats hope to use the weak economy against him as they did against his father's re-election bid in 1992.

The Bush team is happy to watch the Democrats squabble.

"The Democrats have a lot of time and a lot of internal party politics that they have to sort out first before this even becomes a race with the president. That will happen, of course. But until then this president does not have to deal with the politics side of the business," said White House spokesman Ari Fleischer.

The Republican National Committee's convention in New York will not be held until early September 2004, coming right before the third anniversary of the September 11 attacks.

Bush, based on his performance in the war on terrorism, has maintained a job approval rating of more than 65 per cent.

Some Republicans are talking about Bush raising up to $ 200 million for his re-election bid. But senior White House officials said that was too high because Bush will be doing fewer events.

Bush will campaign with the same running mate as he did in the 2000 election, Dick Cheney, who said in recent weeks that he plans to be on the ticket and that he is in good health despite a history of heart trouble.