Edward Liddy, chief executive of AIG, moved to defuse political opposition to the government’s latest $150bn rescue plan for the insurer, saying US taxpayers would “do very well” out of the deal.

In an interview with the Financial Times following the announcement of the revised terms for the bail-out, Mr Liddy, who took over at AIG after the first government rescue in September, said a failure of the insurer would have created mayhem in the global financial system.

The insurance giant also announced on Monday that it made a net loss of $24.5bn in the third quarter, compared with a $3bn net profit in the same period last year.

“The Federal Reserve and the US Treasury now understand they are dealing with systemic risk rather than one company’s problems,” said Mr Liddy, a former chief executive of the insurer Allstate and board director of Goldman Sachs.

In an effort to defuse a possible political backlash over the use of yet more taxpayers’ funds to save a stricken financial institution, Mr Liddy said the government could make money out of the latest deal.

He pointed to the 10 per cent interest payable by AIG on the $40bn-worth of preferred shares to be acquired by the government as well as the interest on a $60bn loan from the authorities, which is set at 3 per cent over the London interbank borrowing rate.

Mr Liddy also said that most of the gains from a rise in the value of AIG’s toxic assets over the next few years would be retained by the Fed, not the company. A special vehicle is being set up to take over the billions of dollars in illiquid credit default swaps and mortgage-backed assets owned by AIG.

“The taxpayer is going to do very well out of this deal,” Mr Liddy said.

The debt securities which triggered AIG‘s collapse continued to plague the company in the third quarter. Included in its net loss was a pre-tax charge of around $7bn related to AIG Financial Products’ credit default swap portfolio, as well as a pre-tax impairment charge of $18.3bn from the group’s investment portfolio.

Mr Liddy said that in the frantic moments that preceded the first rescue of AIG, regulators had not paid enough attention to the cash drain on the company’s resources caused by the toxic assets.

Since the Fed did not regulate insurers, it had initially overlooked the pitfalls of the previous bail-out, he added.

Despite receiving an $85bn government loan in mid-September, AIG was in danger of running out of money due to the high interest rate charged by the government and the need to put up capital as its assets continued to depreciate.

Mr Liddy said that with the new plan, the authorities wanted to avoid a repeat of the credit markets paralysis that followed the collapse of investment bank Lehman Brothers, which went bankrupt just before the first rescue of AIG.

“The collapse of Lehman caused the credit markets to freeze up. Had AIG gone, it would have been even more significant,” Mr Liddy said.

Mr Liddy pledged to press on with a wide-ranging programme of asset sales aimed at raising funds to repay the $100bn in capital injected by the government.

He said the extension of the duration of the main government loan from two to five years and the cutting of the loan’s value from $85bn to $60bn would ensure AIG did not have to dispose of businesses at fire-sale prices.

“We have more capital so we don’t have to sell good assets in bad markets,” he said. AIG has not announced a single major disposal so far, partly because potential buyers have not been able to get funding.

Mr Liddy has said he wants to sell most of AIG’s life assurance operations, and close its troubled financial services unit, to create a smaller company focused on its general insurance business around the world.

However, he reiterated that he wanted to keep a majority interest in its Asian life assurance and savings business – one of the jewels in AIG’s crown.