At least 10 people were killed but that toll might rise, Mayor Michael Bloomberg said.

State governor Andrew Cuomo said that New York police and national guard troops "saved hundreds of lives yesterday".

Firefighters battled 23 serious fires, some of which continued yesterday, Bloomberg told a press conference. He said 80 homes were destroyed.

Smoke lingered over many streets after a huge fire tore through 50 homes in the Breezy Point district of Queens. Firemen in boats rescued about 25 people trapped by fire. The homes were left a tangled mess of wood and metal.

Breezy Point is near Rockaway Beach, where firemen rescued several people trapped in their homes by a 4.2 metre storm surge. Upturned cars were left strewn across streets near the Rockaway seafront.

A spectacular explosion at a Manhattan electricity sub-station at the peak of the storm cut power to 193,000 homes on the island.

"We see a pop. The whole sky lights up," said Dani Hart, 30, who was watching the storm from the roof of her building in the Navy Yards in Brooklyn.

"It sounded like the Fourth of July," Stephen Weisbrot said from his 10th-floor apartment in lower Manhattan.

About 300,000 other homes in New York lost electricity as Sandy tore down trees and flooded power transmission facilities.

Some subway stations had water above platform level and it was expected to be several days before trains were fully operational again.

"In 108 years our employees have never faced a challenge like the one that confronts us now," said the chairman of the Metropolitan Transportation Authority chairman, Joseph Lhota.

The streets of Lower Manhattan were pitch black until the sun rose. But the power cuts left giant apartment blocks without elevator service.

"I have no water, no gas. I walked down 20 flights of stairs to get to street level and now I must try to get to the office," said accountant Joseph Warburton as he headed for Midtown along Third Avenue.

Tommy Flynn, a 57-year-old photographer, said he was preparing to spend several days at home without electricity. "My girlfriend and I have stocks of water, instant food, batteries, candy and chocolate. And we have nowhere to go," he said.

The roads were strewn with uprooted trees, telephone booths ripped off their foundations and traffic lights blown down with wires left exposed.

Some caretakers bravely started to sweep up the debris in front of their buildings.

New York University's Tisch hospital had to evacuate more than 200 patients when it was caught in the power cuts and its backup generator failed. Long lines of ambulances were still taking patients away yesterday morning.

Safety experts also nervously watched a crane over a 90-storey luxury apartment block that buckled in the gale-force winds.

The boom of the crane swayed in the fierce gusts over streets near Central Park, which police and fire services evacuated because of the risk it could fall.

Alice Goldberg, 15, a tourist from Paris, was watching television in the hotel - whose slogan is "Uptown, Not Uptight" - when a voice came over the loudspeaker and told everyone to leave.

"They said to take only what we needed, and leave the rest, because we'll come back in two or three days," she said as she and hundreds of others gathered in the luggage-strewn marble lobby. "I hope so."

In another spectacular demonstration of its power, the hurricane pulled off the facade of a three-story building in the Chelsea district. No injuries were reported.

US President Barack Obama, who cancelled another day of campaigning a week before Election Day, won plaudits for his handling of the crisis from a fierce foe who backs Mitt Romney.

New Jersey Governor Chris Christie produced a glowing character reference for Obama, which is already shaping endgame election news coverage.

"The president's been great. I spoke to him three times yesterday, he called me for the last time at midnight last night, he asked me what I needed," Christie told MSNBC.

As Hurricane Sandy closed in on the northeast, it converged with a cold-weather system that turned it into a monstrous hybrid of rain and high winds - even bringing snow in West Virginia and other mountainous areas inland. Remnants of the now-former Category 1 hurricane were forecast to head across Pennsylvania before taking another sharp turn into western New York state by today.

Canada was the last feel the force of the storm, with more than 130,000 homes and businesses in Canada left without power yesterday morning after Sandy knocked down trees and power lines.

Even before it made landfall in New Jersey, crashing waves had claimed an old, 15-metre piece of Atlantic City's world-famous Boardwalk. "It's total devastation down there, there are boats in the street five blocks from the ocean," said evacuee Peter Sandomeno, one of the owners of the Broadway Court Motel in Point Pleasant Beach, New Jersey.

"That's the worst storm I've ever seen, and I've been there for 11 years."