More than 180,000 evacuated residents of New Orleans are to be allowed to return to their homes over the next ten days as the floodwaters from Hurricane Katrina are pumped out of the city and the clean-up picks up pace.

Mayor Ray Nagin announced that large parts of the city, which had a population before the hurricane of almost 500,000, will reopen early next week. The French Quarter will reopen the following week after rigorous safety checks of its historic buildings.

"The city of New Orleans will start to breathe again," Mr Nagin said. "We will have life. We will have commerce. We will have people getting into their normal mode of operations, and the rhythm that makes this city so unique."

Although officials have made progress in restoring power and water supplies, government tests show that the floodwaters still covering up to half of the city contain dangerous bacteria and industrial chemicals. The air, however, is safe to breathe.

The first section to reopen to residents, on Monday, will be Algiers, across the Mississippi River from the French Quarter. The city’s Uptown section, which includes Tulane University and the Garden District, will be reopened in stages next Wednesday and next Friday, followed by the French Quarter on September 26.

"The French Quarter is high and dry, and we feel as though it has good electricity capabilities," the mayor said, "but since it’s so historic, we want to double- and triple-check before we fire up all electricity in there to make sure."

The mayor's announcement came as President Bush, who was battered by political criticism for the slow and ineffectual federal response to the disaster, prepared to deliver a primetime national television address from New Orleans.

Congress has already allocated $62 billion in federal funding to tackle the Katrina disaster in New Orleans and along the Gulf Coast strip and Mr Bush could ask for a further $50 billion over the next month. The death toll from the storm has climbed past 700, with some corpses still to be found and collected in New Orleans.

Mr Bush is expected to announce a more ambitious recovery plan and try to reassure Americans that their Government could respond to new terrorist attacks or natural disasters, despite major lapses over the storm for which he has accepted personal responsibility.

A New York Times/CBS poll found 56 per cent of Americans were less confident about the Government’s ability to respond to future emergencies, whether man-made or natural, after the Katrina fiasco.

"There were shortcomings. There were breakdowns in communication, things that we shouldn’t be tolerating in our country in a post-9/11 world, and President Bush takes responsibility and accountability for that," Dan Bartlett, a White House aide, told CNN.

"He’s going to make sure that we work at every level of government across the country to ensure that we learned the lessons from this experience so we can do everything we can to help make sure it doesn’t happen again."

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