President Bush today urged a divided Congress to unite behind an unprecedented banking sector bailout that he said would help protect America's wider economy from the effects of the credit crunch and the sub-prime mortgage crisis.

In an early morning statement broadcast from the White House before the opening of US financial markets, Mr Bush said that he understood taxpayer concerns about the huge cost of the bailout - up to $700 billion (£380 billion) in public money.

"The ultimate cost to the taxpayer will be far less than that," he said. "In fact, we expect over time that most, if not all, of the tax dollars we invest will be paid back."

The deal was reached in a weekend of tense negotiations on Capitol Hill in which Hank Paulson, the Treasury Secretary, pushed through the package despite the reservations of both Republican and Democratic leaders.

The largest financial rescue in US history is designed to stop the worst financial crisis since the Great Depression of the 1930s spreading from Wall Street to Main Street, although its critics say that it gives an unaffordable safety net to a financial industry brought down by its own greed.

The plan would give the Bush Administration broad power to use billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved banks and financial institutions.

The House of Representatives is expected to vote on the legislation later today and Senate later in the week and Mr Bush asked them to approve it promptly. "I’m confident that this rescue plan, along with other measures taken by the Treasury Department and the Federal Reserve, will begin to restore strength and stability to America’s financial system and overall economy,” he said.

The bailout has become a key issue in the presidential contest between Barack Obama and John McCain, both of whom have given it their cautious support while claiming credit for certain aspects of the final deal.

“This is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option,” Mr McCain, the Republican candidate who briefly "suspended" his campaign pending the bailout deal, said last night. In his statement this morning, Mr Bush praised the leadership “on both sides of the aisle who came together when our nation was counting on them” during the “sometimes difficult” negotiations.

He said that the "bold Bill" addressed the “root cause” of the financial crisis and would also ensure that failed executives would not receive a windfall payment from the US taxpayer.

“With this strong and decisive legislation, we will help restart the flow of credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls,” Mr Bush said.

“It will make clear that the United States is serious about restoring confidence and stability in our financial system.”

Mr Bush repeated his assertion that the Bill would present a “difficult vote” for members of the US Congress but added that he was confident members of both parties would support it.

He went on: “Congress can send a strong signal to the markets at home and abroad by passing this Bill promptly. A vote for this Bill is a vote to prevent economic damage to you and your community.”

Mr Bush said the plan would “begin to restore strength and stability to America’s financial system and overall economy”, adding: “I’m confident that in the long run America will overcome these challenges and remain the most dynamic and productive economy in the world."

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