Confidence was building on Saturday that talks on the US government’s $700bn financial rescue plan would result in an outline agreement before the end of the weekend in spite of the political wrangling that threatened to derail the bail-out on Thursday.

Speaking on Saturday morning, Harry Reid, Senate majority leader, said congressional staff and negotiators from the Treasury department had held a marathon meeting through the night and progress had been made. “We hope that sometime tomorrow evening we can announce there has been some kind of agreement in principle,” he said.