New York's City Council narrowly voted in favor of extending term limits Thursday, opening the way for Mayor Michael Bloomberg to stay in office.

The council passed the bill by 29 votes to 22 after a heated debate. This means that Bloomberg, who ends his second term next year, will be able to seek re-election to another four years in office.

A simple majority of 26 in the 51-member council was needed for the bill to pass.

Referendums in the 1990s had twice confirmed the two-term limit and many New Yorkers said that only a fresh referendum -- not a City Council vote -- could change the rule.

But Bloomberg's supporters argued that the popular mayor and billionaire businessman should have a chance to stay in office at a time when the Wall Street meltdown poses a grave threat to the city economy.