Lawmakers from both parties said a deal was close at hand ahead of a meeting at the White House including John McCain and Barack Obama, the leading candidates in November's presidential elections.

By early afternoon, the US Treasury was considering a bipartisan congressional proposal to approve the whole $700bn but initially release about $250bn of the funds. Chris Dodd, chairman of the Senate banking committee, said ”fundamental agreement” had been reached.

But legislators had yet to agree with the Treasury the details for a number of issues, including whether the $700bn sought by the administration would be disbursed in a single tranche or over time; the circumstances under which the government would take equity stakes in participating banks; and help for homeowners.