The US Hurricane Centre has downgraded Ike to a Category 1 storm.

Earlier on Saturday the hurricane crashed onto the densely populated Texas coast near Houston threatening devastation along the Gulf of Mexico.

The enormous hurricane, roughly the size of Texas itself, may be the worst storm to hit the state in nearly 50 years.

It is the biggest storm to hit a US city since Hurricane Katrina devastated New Orleans in 2005.

As many as 100,000 homes could be flooded and more than 4.5 million people left without power.

The hurricane drove a wall of water over Galveston, Texas, and submerged a 17-ft sea wall built to protect the city after a 1900 hurricane killed at least 8,000 people. More than half of its 60,000 residents had fled and emergency operations were suspended through the storm.

About 50 miles inland, Ike lashed downtown Houston's glass-covered skyscrapers, blowing out windows and sending debris flying through water-clogged city streets.

Texas officials are waiting for a break in the weather to deploy a search and rescue operation.

Mark Miner, a spokesman for Texas Governor Rick Perry said: "We expected a major storm and our expectations unfortunately came true. The weather needs to clear up a little bit to see just what the devastation was."

The hurricane has shut down 17 oil refineries on the Gulf of Mexico, the heart of the US oil sector where 22 per cent of fuel supplies are processed. Energy experts said it would take at least a week for the refineries to get back to normal.

President George Bush said: "This is a huge storm that is causing a lot of damage, not only in Texas, but also in parts of Louisiana."

He said the government would monitor gas prices to prevent extraordinary price increases because of Ike.

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