DENVER -- In a one-on-one interview with 7NEWS, Sen. John McCain debunked a CNN report that said the McCain campaign is considering ceding Colorado to Democrat Sen. Barack Obama.

While Colorado is listed as a swing state, top strategists said the situation is looking increasingly bleak and told CNN that Colorado was "gone."

McCain said Tuesday that there was no truth in that report.

"We're going to be in Denver and Colorado Springs in the next couple of days. We're not only competitive in Colorado but we'll win Colorado," McCain said.

He admitted that the economy has "hurt our campaign, to some degree."

"But the fact is, we see us moving back up very rapidly and I'm the underdog in this race ... I love being the underdog. We will be up late on Election Night looking for returns in Colorado, New Mexico and Nevada and other Western states because they're battleground states," McCain said.

McCain said his plan to win the more than 1 million unaffiliated voters in the state is by giving them a "concrete plan to get the economy moving again, out of the ditch, to keep people in their homes by giving them new mortgages so they can afford to keep making their payments, by creating millions of jobs through nuclear power, wind, tide, solar, coal, and new technology."

He promised to keep the taxes low and not raise them on small businesses, which he claims Obama wants to do. He also wants to cut spending in Washington.

"I'm confident that we will do very well in Colorado and I look forward to coming back, as I have many times. I'm a western senator, I understand the issues that affect our Western states. Sen. Obama does not have any experience in those areas," McCain said.

The story on CNN's Web site cited unnamed McCain strategists and advisers as saying the prospect of the Republican presidential candidate winning Colorado, as well as Iowa and New Mexico, looked bleak and that the Obama campaign was in a better position to get out the vote in Colorado. However, the report said that McCain campaign manager Rick Davis didn't agree that Republicans should give up on Colorado and its nine electoral votes. Davis said he believes the state is still winnable.

If the CNN report is true, the announcement is a major shift for the campaign that has always called Colorado a must-win for McCain.

McCain's regional spokesman Tom Kise said the report isn't true and that pulling back in Colorado isn't on the table. He said McCain would be back campaigning in the state on Friday.

A national campaign spokeswoman, Jill Hazelbaker, issued a statement saying the race between McCain and Obama was tightening.

"We are within striking distance in the key battleground states we need to win," Hazelbaker said.

Both McCain and Obama and their surrogates have made frequent trips to Colorado and have targeted the new battleground state with constant television ads. Obama has opened 40 offices throughout the state and McCain has 10.

Obama and McCain have swapped the lead in polls this year but an Oct. 14 poll by Quinnipiac University gave Obama a 9-point lead over McCain in Colorado. Pollsters said Obama also widened his lead among the state's critical independent voters, who outnumber both Republicans and Democrats.

McCain continues to spend money on television advertisements in Colorado. He spent roughly $700,000 the last two weeks and has ordered a similar spending levels for the week ahead. Obama is spending a little less than $1 million a week in Colorado.

One of the McCain sources told CNN that ad spending in Colorado could be increased -- even doubled -- to somewhere in the ballpark of $1.5 million.

"We're not giving up on Colorado," one of the sources said. "But we need to have a math scenario that doesn't count on it.”

CNN said the sources emphasized that the campaign needs an alternative to get to 270 electoral votes, to consider a scenario that does not count on Colorado. They did not say the campaign was ready to pull resources.

Colorado has shifted slightly more Democratic in recent years but it's only backed two Democratic presidential candidates since 1952. The last one to win was Bill Clinton in 1992 and he was in a three-way race with former President George H.W. Bush and Ross Perot.

The report came as Sarah Palin wrapped a daylong trip through Colorado, where she attracted crowds in the thousands at each of her three stops in Colorado Springs, Loveland and Grand Junction.

Obama's campaign manager, David Plouffe, said winning Colorado's nine electoral votes is absolutely essential to his campaign's strategy.

Plouffe said the campaign's state organization, which developed during the caucuses, is among its strongest nationally. He said if Obama can win all the states John Kerry did in 2004 plus Iowa, New Mexico as well as Colorado, Obama would reach the 270 electoral votes needed to win the White House. Winning those states would mean Obama wouldn't have to depend on winning Ohio or Virginia, he said.

"Colorado is a tipping-point state," Plouffe said.