UPDATE 16-Florida Panhandle pummeled by record-breaking Hurricane Michael

(Adds first storm-related death, wind speed declining, eye of storm over Georgia)

PANAMA CITY, Fla., Oct 10 (Reuters) - Hurricane Michael, the fiercest storm to hit Florida in a quarter century and the third-most powerful ever to strike the U.S. mainland, battered the state's Gulf coast on Wednesday with roof-shredding winds, towering surf and torrential rains.

Michael, whose rapid intensification as it churned north over the Gulf of Mexico caught many by surprise, made landfall early in the afternoon near Mexico Beach, about 20 miles (32 km) southeast of Panama City in Florida's Panhandle region, with top sustained winds reaching 155 miles per hour (249 kph).

The storm came ashore as a Category 4 hurricane on the five-step Saffir-Simpson wind scale. Its sustained winds were just 2 mph (3.2 kph) shy of an extremely rare Category 5.

The storm was downgraded hours later with winds of 90 mph (150 kph) as the eye moved across southwestern Georgia, the National Hurricane Center said.

Florida Governor Rick Scott said that as of nightfall, about five hours after Michael struck land, there were no confirmed reports of storm-related fatalities. But in Gadsden County, sheriff's spokeswoman Anglie Hightower said a man was killed when a tree toppled onto his house in Greensboro, near the Georgia border.

Severe flooding, structural damage, uprooted trees and downed power lines appeared widespread in coastal areas near where the storm made landfall.

A video posted on Twitter showed winds ripping apart a house on Mexico Beach, its debris washing up to adjacent properties. Scott said there was a "lot of roof damage" in the storm's path.

My God, its scary. I didnt expect all this, said Bill Manning, 63, a grocery clerk who fled his camper van in Panama City for safer quarters in a hotel, only to see the electricity there go out. "Panama City, I dont know if there will be much left." .

(Reporting by Devika Krishna Kumar in Tallahassee, Florida; Additional reporting by Rod Nickel in Panama City, Florida, Susan Heavey, Steve Holland and Roberta Rampton in Washington, Gina Cherelus and Barbara Goldberg in New York, Brendan O'Brien in Milwaukee, Liz Hampton in Houston, Andrew Hay in New Mexico; Writing by Lisa Shumaker, Bill Trott and Steve Gorman; Editing by Bill Berkrot and Cynthia Osterman)