A Hillary Clinton adviser has resigned over her comment that Barack Obama would not be ahead in the race for the White House if he were not black.
Geraldine Ferraro said her remarks had been taken out of context
Geraldine Ferraro, a vice-presidential candidate in 1984, announced she was stepping down from an honorary role on Mrs Clinton's finance committee.
Earlier, she had told US network ABC that her remarks had been "spun by the Obama campaign as racist" but were not.
Mr Obama in turn rejected the idea that being black was a big advantage.
Mrs Clinton has distanced herself from the comments, quoted in a US newspaper interview last week.
The row flared up on Tuesday, the day of the Mississippi primary election, which was convincingly won by Mr Obama.
The result is not decisive but boosts his lead in terms of delegates at the August convention where the party will choose its White House candidate.
With the Republicans' race settled, their presumptive nominee, John McCain, has been focusing on a nationwide fund-raising drive.
A spokesman for the Clinton campaign confirmed on Wednesday afternoon that Ms Ferraro had stepped down from her unpaid position on the New York senator's finance committee.
The row was sparked by an interview given to a California paper in which she seemed to imply that Mr Obama had only been successful because of his ethnicity.
"If Obama was a white man, he would not be in this position," Ms Ferraro was quoted as saying.
Earlier Ms Ferraro appeared on TV news shows to argue she had been misrepresented and had always opposed all kinds of discrimination.
She told CBS's The Early Show she had been talking about Mr Obama being able to mount a "historic candidacy" that excited the country, rather than making a racial remark.
Speaking on ABC's Good Morning America, she said: "My comments have been taken so out of context and have been spun by the Obama campaign as racist."
'Slice and dice' politics
Mr Obama told the same ABC show that he did not consider being black had given him a huge advantage, but nor was it a disadvantage.
Barack Obama said Geraldine Ferraro's remarks were divisive
"I think that if anybody was looking for the quickest path to the presidency, they would not say 'I want to be an African-American man named Barack Obama'.
"I don't think that's in the handbook for running for president."
He said Ms Ferraro was participating "in the kind of slice and dice politics that's about race and gender... and that's what Americans are tired of".
One of Mr Obama's senior advisers, David Axelrod, had called for Ms Ferraro to be removed from the Clinton campaign.
The Obama campaign dismissed unpaid foreign policy adviser Samantha Power last week after she was quoted by the Scotsman newspaper calling Mrs Clinton "a monster".
Mrs Clinton said on Tuesday: "It's regrettable that any of our supporters - on both sides, because we both have this experience - say things that kind of veer off into the personal."
Former President Bill Clinton planned to campaign for his wife in Pennsylvania on Wednesday, reflecting the state's importance as the next major battleground.
HAVE YOUR SAY
This won't damage the Democratic Party, but off color comments will damage those who make them.
Mary Martin, Atlanta, United States
It is due to vote on 22 April, with 158 delegates up for grabs.
Under the Democratic Party's system of proportional representation, Mr Obama picked up at least 17 of the 33 delegates on offer in Mississippi. Mrs Clinton gained 11 delegates, while five more are still to be awarded.
Mr Obama currently leads the fight for delegates with 1,596 to Mrs Clinton's 1,484, according to AP.
The successful candidate needs 2,025 delegates to secure the Democratic nomination.
Meanwhile, Mr McCain, who has raised less in election funds than either of his Democratic opponents, is touring the country as he seeks to fill his campaign coffers.
The Arizona senator will visit Boston, Pennsylvania and Chicago this week.