By Ros Krasny and Jason Lange
MANCHESTER, New Hampshire (Reuters) - Congressman Ron Paul is one of the favorites to win the Iowa caucuses vote on January 3 but his libertarian and isolationist message may to be too much for Republican voters and party grandees as the nomination process moves to other states.
"What he could do is turn a victory in Iowa into a heart attack for the Republican establishment. They see him as someone they really can't relate to very much," said Tobe Berkowitz, a communications professor at Boston University.
A poll this week showed Paul leading the race in Iowa, where he has a strong organization, ahead of Republican front-runners Newt Gingrich and Mitt Romney.
But New Hampshire, the next voting state in the nomination race, is still a stronghold for Romney who leads polls here by double digits. The real key lies beyond the January 10 New Hampshire primary when the focus shifts to the heart of the Republican primary states.
Most opinion polls for South Carolina, the third state to hold a 2012 Republican nominating contest, give a resounding "no" to Paul. The Texan has been polling in single digits in the state, home to many active and retired military personal who may not take kindly to Paul's non-interventionist military doctrine.
"He's a libertarian Republican. Will that play in South Carolina, Georgia and elsewhere? The fact that he's a libertarian throws a lot of monkey-wrenches into Republican orthodoxy," Berkowitz said.
On Tuesday, Paul outlined his views to high school and college students in Manchester, and didn't hold back.
He described U.S. military spending as a subsidy that allows other countries to spend more on their own economies. Federal spending on education only pushes up costs, he said.
A trade war with China would be a tax on low-income Americans. And the United States "is moving toward a military state when the military assumes the rule of law."
He inspires a loyal following, attracted by his no-nonsense attacks on government spending.
STICKS TO HIS BELIEFS
At a Manchester town hall on Monday night, voter Sylvia Tobin, 23, said Paul's "rigidity" was a positive for her. "He has his beliefs, and sticks to them," she said.
"My family is very into Ron Paul. He has the guts to face pressure from the press, and from lobbyists," said Sylvain, a French immigrant who asked that only his first name be used.
He plans to cast his first vote as a U.S. citizen for Paul in the New Hampshire primary.
Success in the polls will bring out much more intense scrutiny from the media and from Paul's Republican rivals.
"He has positions on issues that elements of the Republican Party are going to see as extreme. If Paul manages to win Iowa there is going to be this reaction among Republican elites, who are going to say 'look we can't put Paul forward, we need a safe candidate,'" said Dante Scala, a political scientist at the University of New Hampshire.
Already, Paul has had to deal with the fallout of racist commentary in newsletters that went out under his brand in the 1980s and 1990s, with titles such as "Ron Paul's Freedom Report" and the "Ron Paul Political Report."
In Manchester on Tuesday, Paul brushed off the controversy. "Everyone knows I didn't write those," he said.
A congressman on and off since the 1970s, Paul was an early inspiration for the Tea Party movement and he has found his small-government cause becoming more mainstream.
Some of his decades-long positions, including the need to crack down on - or abolish - the Federal Reserve, have moved toward the Republican mainstream in this election cycle, with candidates such as Gingrich and Texas Governor Rick Perry also taking on the Fed.
Young voters are among the biggest fans of the septuagenarian former obstetrician. Many find Paul's mantra of less government interference appealing.
"He's attractive to people of my generation because younger people don't want to be controlled, and want to make decisions based on the moment," said C. J. Petersen, 18, from Bedford, New Hampshire. Petersen is still undecided.
Paul is in third place with 12.4 percent support in a RealClearPolitics compilation of national polls, behind Gingrich at 27 percent and Romney at 24 percent.
(Reporting By Alistair Bell)