Former Maryland Lt. Gov. Michael Steele slipped into second place after four rounds of balloting today in the race to become Republican National chairman.

The election turned into an outsider-insider contest, with Steele attempting to buck tradition by defeating a sitting member of the Republican National Committee. The Marylander served on the panel in the early part of this decade, when he was chairman of the state Republican party, but is no longer active.

He faced an uphill challenge against South Carolina Republican Chairman Katon Dawson, who was pulled ahead on the fourth ballot for the first time. Dawson led Steele by two votes as other contenders failed to progress and their supporters switched sides in the secret-ballot election.

Mike Duncan of Kentucky, the incumbent chairman, led in the first round but faded after it became clear that he could not gain the 85 votes needed to win. He withdrew after the third round but did not publicly endorse a successor.

“Obviously the winds of change are blowing at the RNC,” said Duncan, who has served on the committee for 17 years.

Duncan was hand-picked for the chairmanship two years ago by President George W. Bush and his political adviser, Karl Rove. Republican setbacks in the 2006 and 2008 elections fed a mood for change among the 168-member committee, which has joined other members of the party in criticizing Bush’s leadership.

Two other candidates remained in the race, Michigan Chairman Saul Anuzis and former Ohio Secretary of State Ken Blackwell, another outsider. Anuzis failed to gain support in the third round and Blackwell, who was last on every ballot, continued to lose votes.

The results of the fourth round were as follows:

Katon Dawson--62

Michael Steele—60

Saul Anuzis—31

Ken Blackwell—15

Balloting in the fifth and possibly decisive round begins in 15 minutes.