Just 37 percent of college-educated adults told the Edelman Trust Barometer that they trusted the U.S. government - 16 points down on a year earlier and seven points below the global average.

The United States was not quite at the bottom of the heap as levels of trust in governments in some Western Europe countries including France, Spain and Italy were even lower, but the scale of the American decline was particularly dramatic.

The mood of disillusionment was amplified because it came off a brief phase of enthusiasm for the role of the state in preventing economic Armageddon, said Richard Edelman, head of U.S. public relations firm Edelman, which commissioned the study.

"In 2008 and 2009, it was a case of government to the rescue and everybody said government saved the day. That raised expectations - but then you get crushed," he told Reuters.

In the case of the United States, three big negatives have weighed heavily in the past year: the impasse between Democrats and Republicans over the budget; the crisis over spying revelations by former U.S. contractor Edward Snowden; and the fumbled rollout of the contentious Obamacare healthcare system due to technical problems with a federal website.

"There is almost despair in some aspects of government. How does a computer system not work for healthcare? That is just a competence question," Edelman said.

The results of the annual trust survey were released on Monday before being presented at the January 22-25 World Economic Forum meeting in the Swiss ski resort of Davos.

As a result of the loss of faith in the state around the world, the gap in trust between government and business has widened to a record level, with corporations now enjoying a 14-point advantage.

That gap was especially large in India, as the country heads into elections amid a wave of corruption scandals, and in Brazil, where alleged corruption, bus fare hikes and high public spending for the 2014 soccer World Cup have fuelled anger.

Trust in business overall stabilized at 58 percent. But while confidence in some industry sectors is high - such as technology and autos - there are still widespread demands for more regulation of financial services, energy and food.

Family-owned and small businesses are more trusted than big business across the globe, and there are notable regional variations, with companies based in the main emerging markets suffering a big trust deficit compared to Western firms.

The survey took the opinions of 6,000 college-educated, relatively affluent people aged 25-64 in 27 countries, from October 16 to November 29.

(Editing by Pravin Char)