9:21pm UK, Saturday September 27, 2008

Top US Senate Republicans have said they are making good progress towards a massive financial bail-out bill and hope to reach an agreement on Sunday, with a vote likely to follow on Monday.

Harry Reid and Chris Dodd say they are committed to hammering out a deal

Kentucky Senator Mitch McConnell, the Senate Republican leader, told reporters: “The goal would be to announce an agreement tomorrow and to have a vote on Monday.” 

US President George Bush urged political leaders to “rise to the occasion” and pass a “substantial” rescue plan.

Top US Senators say they will stay in Washington “as long as it takes” to get a bail-out deal arranged.

They are trying to agree on the terms of a $700bn (£382bn) package to save failing financial institutions and stabilise the US economy.

Democratic leaders Harry Reid and Chris Dodd said they were trying to get “serious Republicans” to work with them after talks between the two parties over a financial rescue plan broke down.

Mr Reid is the Senate leader and Mr Dodd the chairman of the powerful Senate banking committee.

The pair also told a press conference that bringing Barack Obama and John McCain back to Washington to take part in the talks had caused problems.

Mr Reid said: ”The insertion of Presidential politics has not been helpful.”

But senior Republicans disagreed.

New Hampshire Senator Judd Gregg said their hasty return from the campaign trail had “significantly moved the process along”.

The two candidates suspended their Presidential campaigns to join crisis talks at the White House.

And at the United Nations in New York, Gordon Brown said the world needed to get behind the US politicians as they tried to reach a deal.

“In the short term, each country is taking action to deal with the fallout of the credit crunch,” Mr Brown told a UN summit.

“And America deserves support from the rest of the world as it seeks to agree in detail what all parties have agreed in principle.”

The Prime Minister held emergency talks with President Bush about the crisis.

Mr Bush’s administration is said to be privately in panic about what might happen to the US economy if the deal does not pass.

But as the wrangling in Washington DC continued the US stock exchange held steady.

The Dow Jones was down slightly. The index had seen small rises after a deal was thought to be imminent.

But there was more bad news for big business as US bank Washington Mutual became the latest casualty of the crisis.

The mortgage lender was sold off to investment bank JP Morgan Chase.