The Bush administration will support a short-term extension of the multi-billion dollar terrorism risk insurance programme enacted following the September 11 2001 terrorist attacks, only if US insurers agree to bear more of the cost of funding it, a senior lawmaker said yesterday.

At hearings on Capitol Hill yesterday, Senator Richard Shelby, the Alabama Republican who chairs the Senate banking committee, indicated that the Bush administration was willing to design "a targeted, short-term programme" that would transform the Terrorism Risk Insurance Act (Tria) from a "taxpayer-supported system".