WASHINGTON (AP):

Scrambling for a quick accord on the US$700 billion bailout, the Bush administration and leading United States lawmakers have agreed to include mortgage aid and strong congressional oversight, along with unprecedented help for failing financial institutions, a key lawmaker said yesterday.

Unimpressed, investors sent stocks plummeting anew, pushed oil up US$16 a barrel and propelled gold prices ever higher as they searched for a safe place to park their money.

President George W. Bush prodded Congress to pass the administration's rescue plan quickly, declaring, "The whole world is watching".

And there did seem to be movement in talks between the White House and lawmakers.

Representative Barney Frank, a Democrat and chairman of the House Financial Services Committee, said, "A great deal of progress has already been made". A government official with knowledge of the talks said the administration had agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout, a key demand of Democratic lawmakers.

Other terms

Under other additions, the Democrats are asking to the administration package, according to a draft of the plan obtained by The Associated Press, judges could rewrite mortgages to lower bankrupt homeowners' monthly payments.

Companies that unloaded their bad assets on the government in the massive rescue would have to limit their executives' pay packages and agree to revoke any bonuses awarded based on bogus claims.

The proposal by Senator Chris Dodd, a Democrat and the banking committee chairman, would give the Government broad power to buy up virtually any kind of bad asset, including credit card debt or car loans, from any financial institution in the US or abroad, in order to stabilise markets.

But it would end the programme at the end of next year, instead of creating the two-year initiative that the Bush administration has sought. It would also add layers of oversight, including an emergency board to keep an eye on the programme.