A takeover of Wachovia, the troubled regional lender, hinges on congressional approval of a proposed $700bn bail-out plan and the government’s willingness to extend financial aid to potential bidders, people close to the situation said.

Wachovia, led by its chief executive Robert Steel, continued talks with potential buyers including Citigroup, Wells Fargo and Banco Santander at the weekend in the hope of finding a merger partner.