(Reuters) - Humbled by a stunning loss in South Carolina, Mitt Romney said on Sunday he would release this week the tax returns demanded by rivals in his bid to regain the upperhand in the volatile Republican presidential race.
Romney, the longtime frontrunner in the Republican race and one of the wealthiest presidential candidates in history, lost to a resurrected Newt Gingrich in the conservative southern state on Saturday after stumbling badly in debates with clumsy responses to demands that he disclose his tax history.
Trying to recapture his footing as the contest heads to more populous and more moderate Florida, Romney said he would release his 2010 returns and an estimate for 2011 on Tuesday.
"We made a mistake holding off as long as we did and it just was a distraction," Romney said on "Fox News Sunday."
Romney said the returns would be on the Internet and emphasized he was releasing two years of returns after Gingrich posted 2010 taxes on Thursday.
His announcement was meant to draw a line under a bad week punctuated by his own missteps, a surprising turn in an otherwise tightly scripted campaign.
In the midst of a halting response to the tax return controversy, Romney said he paid a tax rate of around 15 percent, low compared to many American wage earners but in line with what wealthy individuals pay on income that largely comes from investments.
Gingrich, a former speaker of the House of Representatives with a sharp tongue that played well in debates, pounced on Romney's weak flank and walloped the former Massachusetts governor by 40 percent to 28 percent in South Carolina.
The Gingrich win reshaped the Republican race and reflected a party that is sharply divided over how to beat Democratic President Barack Obama in the November 6 election.
Florida, which votes on the Republican candidates January 31, could be decisive in ending or prolonging that division, although South Carolina suggested the nomination will not be sewn up so soon.
There have been three nominating contests so far and Gingrich, Romney and former senator Rick Santorum have each won one.
A Florida victory for Romney would restore his luster after the South Carolina loss, while a Gingrich win would solidify him as a serious challenger to the former business executive. A protracted and poisonous Republican battle, in turn, could be a boon to Obama's re-election bid.
With 19 million people, Florida presents logistical and financial challenges that may give an advantage to Romney's well-funded campaign machine.
In Florida, he leads Gingrich by 40.5 percent to 22 percent, according to polls cited by RealClearPolitics.com. Santorum, a social conservative who won the Iowa contest but has struggled to gain traction since then, is third with 15 percent.
ROMNEY FLOODS FLORIDA
Some Florida voters were delighted by Gingrich's rise.
"We are for Gingrich all the way," said Ada Rodriguez, 75, a real estate broker. "Obama is a socialist. He is the same as Castro," referring to Cuban dictator Fidel Castro, the enemy of many in Florida's Cuban exile community.
Eugenio Perez, 58, a Miami property manager, said Gingrich's experience would help him in the White House.
"We live in a very complex world and we can't put a novice in such a high place, as we did in 2008," he said.
Romney has painted Gingrich as a "Washington insider" and signaled on Sunday he will step up that line of attack going forward.
The more moderate electorate in Florida may help Romney, who has failed to consolidate conservative support despite his longtime front-runner status and had hoped to wrap up the nomination after Texas Governor Rick Perry and former Utah Governor Jon Huntsman bowed out last week.
Gingrich's win upended that strategy but the tax release shift and financial advantage could help Romney regain his momentum.
A political action committee formed by Romney backers, Restore Our Future, has spent $5 million in Florida for Romney since mid-December, 20 times the amount spent there so far by any other group supporting a Republican candidate, according to Federal Election Commission filings analyzed by Reuters.
Romney could get some help from Santorum, too, who is competing with Gingrich to be the conservative alternative to Romney.
"It's a choice between a moderate and a erratic conservative - someone who on a lot of the major issues has been just wrong," Santorum told ABC's "This Week" program, citing Gingrich's support for government-mandated health insurance and legislation to halt global warming.
"I think he's a very high-risk candidate."
TAX TUSSLE NOT OVER
Gingrich has see-sawed in national polls but has shown an uncanny ability to hang on, especially after a mass exodus of his staff last summer. Now he must prove to Republicans that he is the most "electable" choice despite hefty political and personal baggage.
Gingrich, who refers to Romney as a "Massachusetts moderate," said having his rival's taxes on the table would at least put an end to that part of the campaign narrative.
"As far as I'm concerned, that particular issue is now set aside and we can go on and talk about other bigger and more important things," Gingrich said on NBC's "Meet the Press."
But the tax issue will almost certainly not go away.
Income inequality has become a leading topic in the presidential race, and Obama has signalled he will talk about an economy that works "for everyone, not just a wealthy few" in his State of the Union address on Tuesday night.
New Jersey Governor Chris Christie, a prominent Romney supporter, sought to offset any backlash that the multi-millionaire Romney may get from reactions to his wealth, largely accumulated from his career as a private equity executive.
"I think what the American people are going to see is someone who's been extraordinarily successful in his life," Christie said on NBC.
"And I don't think the American people want a failure as president. I think they like somebody who's succeeded in whatever they've tried to do and I think that's what you're going to see with Governor Romney."