Hurricane Bill, weaker but still a large storm, headed northeast towards Canada's Atlantic regions on Saturday, buffeting the New England coast of the United States as it passed with heavy swells, surf and rain.

The US National Hurricane Center earlier downgraded Bill to a Category 1 storm packing top winds of 85 miles per hour (140 km per hour). Category 1 storms are the mildest on the five-step Saffir-Simpson intensity scale but are still potentially threatening.

The track forecast for Bill, the first hurricane of the 2009 Atlantic season, would take it on a northward path off the New England coast over Saturday night, moving over or near Nova Scotia in Canada on Sunday, the Miami-based NHC said.

Bill was expected to slowly weaken in the next 24 hours as it moved over cooler waters and encountered increasing vertical wind shear which would reduce its intensity, it said.

Canadian authorities have issued selective hurricane watches and tropical storm warnings for its Atlantic maritime provinces, specifically for parts of Nova Scotia, Prince Edward Island and Newfoundland. On its current track, Bill could threaten some oil and natural gas platforms and refineries.

But at least one major oil facility in Bill's path, the massive 98,200 barrel per day Hibernia platform, built to withstand icebergs and operated by Exxon Mobil Corp, would continue to operate normally, an Exxon spokeswoman said.

Canada's National Hurricane Centre warned people in coastal areas to be alert for heavy rain, storm surge and heavy surf that could cause flooding.

At 11 pm (0300 GMT) on Saturday, Bill's center was about 195 miles (315 km) southeast of Nantucket, Massachusetts and about 435 miles (705 km) south-southwest of Halifax, Nova Scotia.

Rainbands nearing Cape Cod, Nantucket

The NHC said Bill's outer rainbands were approaching Cape Cod and Nantucket late on Saturday.

A tropical storm warning was in effect for parts of the coast of Massachusetts, including the island of Martha's Vineyard, where President Barack Obama and his family are due to start a summer vacation.

US media reported some beaches in Massachusetts, New York and elsewhere on the East Coast were closed to swimmers as the NHC warned that swells generated by Bill could cause dangerous surf and rip currents.

"The forecast track brings Bill to the waters just south of Nova Scotia in 24 hours and very near or over Newfoundland between 24 and 36 hours as a weakening cyclone," the NHC said.

Earlier, Bill dumped rain on Bermuda and pushed powerful rolling surf onto the shores of the 20-square-mile (52 sq km) British territory, a center for the global insurance industry.

No casualties were reported and damage appeared minor. Bermudian authorities ended the tropical storm warning for the island, but islanders, who are used to Atlantic storms, shrugged off the hurricane.

"We've had worse, but it's better to be safe than sorry," said Robert Marquez, desk manager at Bermuda's The Reefs Hotel. – Reuters