Washington: Political wrangling yesterday blocked a potential deal on a bailout package for the battered US financial system, after US markets rallied on optimism that a deal was imminent.

Top Democrats accused Republican White House contender John McCain of sabotaging the 700-billion-dollar package, which they said had largely been agreed upon.

President George W Bush met with top lawmakers from both parties and the men vying to succeed him, McCain and Democrat Barack Obama, at the White House, but failed to clinch a deal.

"We are in a serious economic crisis in the country, if we don't pass a piece of legislation," said the President. "I want to thank the spirit of bipartisan cooperation that's taken place here in Washington."

Shortly before the talks, senior US lawmakers announced the outlines of a deal to rescue Wall Street and shore up the fragile economy, but some Republicans dragged their feet.

Democrats also were calling for limits on pay deals for executives whose companies get rescued under the government deal. And they said that any deal must include strict oversight by federal regulators.

After the White House meeting, Senate Majority Leader Harry Reid, a Democrat, announced a new round of late-night discussions yesterday in a bid to get the deal back on track, with Treasury Secretary Henry Paulson and Federal Reserve Chief Ben Bernanke.

The talks broke off shortly after 0200 GMT (0730 hrs IST) and were set to reconvene today, at 1530 GMT (2100 hrs IST).

Democrats said that McCain's intervention only made the negotiations more difficult.
Source : PTI