Eliot Spitzer ran for New York governor last year promising to clean up the state’s notoriously dysfunctional capital in the same bare-knuckled way that he took on Wall Street banks as a crusading state attorney-general.

Riding on his reputation as “the Sheriff of Wall Street”, Mr Spitzer cruised to victory, winning almost 70 per cent of the vote – an overwhelming sign of how eager New Yorkers were for reform in their state government.

Now, just seven months after taking office, it is Mr Spitzer’s house that is under ethical scrutiny.

This week, he was forced to discipline two of his staff members after a scathing government report detailed how they carried out a political hit job on one of the governor’s rivals.

Mr Spitzer, a Democrat, has denied knowledge of the plot to discredit Joe Bruno, the top Republican in New York state politics, and has publicly apologised for the matter.

But New York Republicans and some editorial writers are asking “what Mr Spitzer knew and when he knew it” – a phrase borrowed from the Watergate hearings. Mr Bruno, a 78-year-old former boxer, seems eager to fight and has called for a fresh inquiry.

Suddenly, Mr Spitzer’s ability to deliver the ethical reforms he promised on inauguration day is in doubt. He promised in his campaign to deliver “change from day one” in Albany, the state’s capital. He vowed to cut taxes, curb wasteful spending and tackle a corrupt political culture.

Implicit in these goals was a plan to shake up the balance of power in Albany – in particular, the clout wielded by Mr Bruno, who controls the Senate, and Sheldon Silver, the Democrat who controls the assembly.

Mr Spitzer seemed to thrive on confrontation with lawmakers, employing tough talk and hardball tactics even against members of his own political party. He allegedly described himself to one lawmaker as a steamroller who would roll over anyone who got in his way.

Mr Bruno, in particular, was unimpressed, telling New York magazine this month that Mr Spitzer “has an attitude about him ... like he’s above it all. He thinks I’m a street kid that doesn’t know night from day. I’ve survived 31 years. I don’t pretend to be a genius. I have common sense.”

Mr Spitzer has failed to master the art of politics, relying instead on the tactics that made him successful as a prosecutor, says Fred Siegel, a history professor at the Cooper Union in New York.

“He was not prepared to govern,” Mr Siegel says. “When he was attorney-general he had extensive subpoena powers that allowed him to embarrass private companies with reputations to protect. That gave him tremendous leverage.”

Jeffrey Gordon, a spokesman for the governor, countered that Mr Spitzer had worked with the legislature to “move forward an ambitious agenda”, reforming workers’ compensation and campaign finance laws. “The governor is going to continue to work in partnership with the legislature to move the state’s agenda forward.”

The damaging revelations came in a report by Andrew Cuomo, a Democrat who succeeded Mr Spitzer as state attorney-general.

Mr Cuomo’s inquiry found that the governor’s spokesman, Darren Dopp, and another administration official inappropriately put pressure on state police to create records of Mr Bruno’s use of helicopters and police escorts.

Those records became the basis of news articles raising questions about whether Mr Bruno had attended political fundraisers at taxpayers’ expense. Mr Cuomo said Mr Bruno’s use of the helicopters was legal, but recommended that the policy be changed.

Mr Cuomo’s report was seized upon by targets of Mr Spitzer’s investigations on Wall Street – some of whom accused him of prosecuting his cases through the media instead of the courtroom – as evidence that they had been treated unfairly by the then attorney-general.

“He has manipulated the press and the law to disparage many other decent people for years,” said Ken Langone, the co-founder of Home Depot who came under fire from Mr Spitzer while he was a director of the New York Stock Exchange.

Mr Dopp has been one of Mr Spitzer’s closest advisers and played a behind-the-scenes role in his investigations of Wall Street firms during his time as attorney-general.

Mr Spitzer suspended Mr Dopp for at least 30 days without pay, while William Howard, deputy secretary for homeland security, has been transferred. Neither of Mr Spitzer’s staff members was found to have broken the law.

Mr Spitzer’s administration says it will fight any effort by Mr Bruno to begin a new inquiry. Yet the episode already appears to be threatening Mr Spitzer’s legislative agenda, with a hard-won measure to strengthen campaign finance regulation possibly at risk.

“It’s hard to see how he’s going to recover,” Mr Siegel says. “The irony is that you have a political culture that badly needs reform.”