Two of the most powerful Democrats on Capitol Hill have said they will refuse to grant the Bush administration authority to spend the remaining $350bn (£238bn) in its troubled asset relief programme unless it makes big changes to its plans for how the funds would be spent.

The comments were made by Chris Dodd, chairman of the Senate banking committee, and Barney Frank, chairman of the House of Representatives financial services committee, despite recent indications by the US Treasury that it is seeking to use the second half of the $700bn fund.