The latest from North Carolina pollsters indicate Senator Elizabeth Dole is trailing even further behind Democratic rival Kay Hagan in a seeming backlash against the incumbent’s “Godless” ad.

The race for North Carolina’s Senate seat has become one of the ugliest in the country. Revelations Dole spent little time in her home state over the last year as senator opened the seat for Hagan, a former state senator backed fiercely by the Democratic Party.

A sharp downturn in North Carolina's blue-collar economy also seem to be making independents and traditional Republicans turning blue on Dole.

Dole sparked a firestorm last week for a TV spot accusing Hagan of accepting money from Godless Americans Political Action Committee, a New Jersey-based group that promotes rights for atheists and the separation of church and state.

Last week’s polls showed Hagan with a slight edge over the incumbent. After a ferocious outcry from Democrats, the press and even some Republicans who said Dole went too far, Hagan appears to be increasing her lead.

After Dole refused to take down the ad — which began running statewide in North Carolina Tuesday — Hagan angrily filed a lawsuit on Thursday, saying the subject was defamatory. She also aired her own ad saying that Dole is breaking the Bible's Ninth Commandment by bearing false witness.

Dole fired back Friday on the airwaves with a new ad that again decried her rival's ties to an atheist group.

Dole says in the ad that the faith of Hagan is not the question. The incumbent says the facts are that Godless Americans held a fundraiser in her honor.

Although the fundraiser was held at the Boston home of a Godless Americans adviser, Hagan's campaign says 40 people hosted the event, including Massachusetts Sen. John Kerry and an ambassador. Also, the event was not billed as a Godless Americans event.

Even so, Dole ends her new ad by asking voters, "If Godless Americans threw a party in your honor, would you go?"

Dole, who speaks often about prayer and faith, is gambling her re-election bid by raising religion in the campaign's final days against Hagan, a Presbyterian church elder who teaches Sunday school.

Dole was once considered such a sure thing that Democrats struggled to recruit a challenger for a Senate seat that has been in Republican hands for 35 years. But a surge in Democratic registrations and excitement surrounding Barack Obama's presidential campaign have boosted Hagan's chances.

Dole's 30-second advertisement shows clips of some members of an atheist advocacy group — the Godless Americans Political Action Committee — talking about some of their goals, such as taking "under God" out of the Pledge of Allegiance and removing "In God We Trust" from U.S. currency. It goes on to question why Hagan went to a fundraiser at the home of a man who serves as an adviser to the group.

"Godless Americans and Kay Hagan. She hid from cameras. Took Godless money. What did Hagan promise in return?" the narrator says.

The ad ends with a picture of Hagan, as another woman declares in the background, "There is no God!"

On Wednesday, her attorneys demanded the ad come down within 24 hours. On Thursday, Hagan's attorneys filed a lawsuit in Wake County Superior Court accusing Dole of defamation and libel.

"Each airing of the advertisement further injures (Hagan's) good name and reputation in the community," Hagan's attorneys wrote in court documents. Thursday's court filing does not detail Hagan's full case against Dole, but allows Hagan 20 days to file the full complaint.

Dole's campaign says the ad does not question Hagan's faith, only her agenda and associations, and attorneys for Dole said in a letter to Hagan's legal team that the ad was factual. Dan McLagan, a Dole spokesman, said the campaign had no plans to pull the ad from the air and dismissed the lawsuit as a "silly political gimmick."

"This lawsuit is frivolous and we will file a motion to dismiss," he said. "Kay Hagan knows that the Dole campaign ad is accurate and she is trying to confuse voters until Election Day."

Hagan responded Thursday with a 30-second spot of her own. Referring to the Ninth Commandment in the Old Testament, Hagan says the campaign is about creating jobs and fixing the economy, "not bearing false witness against fellow Christians."

"Elizabeth Dole's attacks on my Christian faith are offensive," Hagan says in the ad. "She even faked my voice in her TV ad to make you think I don't believe in God. Well, I believe in God. I taught Sunday School. My faith guides my life, and Sen. Dole knows it."

The editorial board of The Charlotte Observer, the state's largest newspaper, compared Dole's ad to an infamous spot run in 1990 by Helms against challenger Harvey Gantt, who is black. That ad showed a pair of white hands crumpling a rejection letter, while a narrator slammed "racial quotas."

Wrenn, who helped write the so-called "hands" ad, said both ads were probably put together under similar circumstances.

"When you get down into the 11th hour of a campaign, the pressure gets up pretty high, and your sleep deprivation factor gets up pretty high," Wrenn said. "Sometimes you just lose your judgment a little bit."

The Associated Press contributed to this report.