Bush said the bill would help Americans deal with economic woes [AFP]

The bill, which passed by 263 votes to 171, was approved by the senate on Tuesday and now goes to George Bush, the US president, for final approval.

Congressional leaders had been optimistic the bill would be approved after several senior politicians said they would drop their opposition to the bill, which had been amended by the senate to attract more Republican votes.

The House had sparked market and political turmoil by rejecting an earlier version of the bailout on Monday by 228 votes to 205.

However, the passing of the bill failed to spark large gains on Wall Street, where traders had been waiting in anticipation of the vote.

The Dow Jones industrial average, which measures the stocks of leading US companies, fluctuated sharply, but posted small gains.

George Bush, the US president, hailed the passing of the package, vowing to sign it and praising it as vital "to helping America's economy weather the financial storm."

'Economic slump'

The measure gives Henry Paulson, the US treasury secretary, the power to buy up bad debt from various Wall Street lending institutions.

Opponents of the bill have expressed concerns over handing that much power to one man, and reject the idea of using taxpayer money to bail out disgraced Wall Street firms.

Democratic and Republican negotiators agreed on the terms of the amended bailout on Tuesday, which includes extended tax cuts for businesses.

In another new measure, the bill raises the limit on federal insurance for bank deposits from $100,000 to $250,000.

"We all know that we are in the midst of a financial crisis, said John Boehner, the leader of the House Republican party,  said shortly before casting his vote.

"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."

The leader of the House, Nancy Pelosi, a Democrat, said the bill was needed to "begin to shape the financial stability of our country and the economic security of our people."

Recommend this article...

Did you enjoy this article? Please bookmark it onto: