How was Gandalf able to defeat the Balrog?

The Balrogs were supposed to be the mightiest Maia except for Sauron so how could Gandalf the Grey defeat the Balrog of Moria?

I assume that when Olorin, Curunir and Co were placed in the bodies of old men that the full use of their power was restricted meaning that they weren't ABLE to utilise their full power.

Gandalf was never said to be a particularly mighty Maia but he was noted as being very wise.

Was the Balrog in Moria severely weakened during it's long stay in Moria?

When Gandalf broke the Balrog's sword did this severely limit it's combat effectiveness?

Did the Ring of Fire aid Gandalf at all in the battle? It says that the ring's purpose was to rekindle the hearts of the Elves and to raise the spirit of Gandalf on his long journey's and tasks and doesn't hint that it gives him increased power in battle.

To me the only explanation would be that the Balrog was severely weakened in some way, but of course it doesn't say anywhere that this was the case.