John McCain's campaign announced Friday it had raised $27 million in July, but the Arizona senator intends to spend it all by the end of the month -- before public financing limitations come into play.

The July number represented McCain's biggest fundraising haul of the year. The campaign reported it also had $21.4 million on hand as of the end of July.

But because McCain has agreed to accept some $84 million in public financing for the general election, he will have to leave his private donations behind after accepting his party's nomination at the Republican National Convention in early September. Rival Barack Obama intends to raise private funds for the general election.

McCain campaign manager Rick Davis said on a conference call Friday that the campaign will spend "much more than we're raising" in August so as to drain the account by the time the public financing limitations kick in.

Davis said the $21.4 million on hand gives the campaign plenty of money to "prosecute a very active campaign in the month of August."

That explains, for example, why McCain can afford to spend some $6 million to run TV advertising during the Olympics this month and has been able to blanket 11 battleground states with millions of dollars in commercials since first going up on the air in June.

He released a new TV ad on Friday in key states that criticizes Obama on taxes.

"Celebrity? Yes. Ready to lead? No," the ad says, with the Democrats' name chanted in the background and pictures of him before adoring crowds. The commercial claims that "Obama's new taxes could break your family budget," mean "higher prices at the pump," and are a "recipe for economic disaster".

Obama spokesman Hari Sevugan responded: "This ad is just more of the same old, false and discredited attacks that Senator McCain knows aren't true."

Davis noted that McCain has donations coming from 600,000 contributors and that the Republican National Committee brought in nearly $26 million in July.

"We have a formidable financial structure," he said.

The national party began the month with $75 million to compete with the Democrats.

Republicans are looking to even out the financial playing field in this campaign, having trailed Democrats in overall fundraising for most of the election cycle. The disparity reflects the enthusiasm among Democrats that's lacking among the GOP.

McCain's last month total exceeded his $21 million June collection; Obama raised more than twice that at $52 million.

Not counting July, Obama overall has raised about $340 million to McCain's nearly $140 million.

The RNC, however, has far outraised its Democratic counterpart, helping McCain and the GOP draw even or near even with Obama and the DNC.

"We will start the general election fully flush," Davis said, putting the budget for September, October and the first few days of November at more than $100 million -- including $84 million in taxpayer money and accounts the RNC shares with the campaign.

The Associated Press contributed to this report.