Richard Shelby, the powerful Republican senator, on Friday said that the US Treasury department’s plan to rescue Fannie Mae and Freddie Mac could be approved by Congress within two weeks, in a sign that opposition to the proposal on Capitol Hill is waning.

“The concept that the Treasury put forward is what we are working toward,” Mr Shelby, the top Republican on the Senate banking committee, told the Financial Times in an interview. “I think it will move down [to the White House] before the break at the end of the month.”