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The US House of Representatives was under growing pressure to pass the Bush administration’s $700 billion financial rescue package after a modified version was overwhelmingly passed in the Senate last night.

The White House and leaders in both parties will now take a second high-stakes gamble to get the Bill passed tomorrow in the House after the Senate sent a clear message that the plan is critical to avoiding a catastrophic meltdown in the US banking system. It passed by 74 votes to 25.

After the stunning failure of the Bill in the House on Monday, by 228 to 206, the modified version, which contained “sweeteners” to make it more palatable to rank-and-file House members, is likely to be sent back to the lower chamber tomorrow, but its passage is still far from certain and the scene is set for another dramatic vote.

The White House and leaders from both parties, scrambling to pass the legislation before more banks fail, hope that the Senate’s clear ratification of the revised plan will give it momentum and increase pressure on the lower chamber to follow suit quickly. The House, where the plan’s fate is still on a knife edge, reconvenes at noon today after the Jewish new year and where party whips are scrambling to garner enough support before they hope to put it up for another vote tomorrow.

“This has not entirely solved the problem but it moves us in the direction of where the American economy needs to be very soon,” said Mitch McConnell, the Republican Senate Minority Leader.

Christopher Dodd, the Democratic chairman of the Senate Banking Committee, said the bipartisan support for the Bill was a “deeply proud moment.”

Yet despite growing optimism among congressional leaders that the $700 billion package can be salvaged from the wreckage of Monday’s 228-206 defeat, its fate is still in the balance.

John McCain, Barack Obama and Joe Biden — the Democratic vice-presidential nominee — all returned to Washington last night to vote in favour of the modified Bill.

But although it was backed in the Senate, where its passage was always far more assured, the Republican and Democratic leadership in the House, all of whom back the plan, are still wary. None was yet claiming to have won over enough holdouts to pass the legislation and there were risks that the Senate modifications, aimed more at attracting Republicans, could push more House Democrats away from the legislation.

James Clyburn, the Democratic whip in the House, said: “To pick up 12 votes on the Republican side you could well lose 20 votes on the Democratic side. That’s a concern we have.”

Last night’s vote, and the plan then to reintroduce the Bill to the House, came amid a sense that the Dow’s record one-day drop after Monday’s defeat had led to a shift in public mood, and a realisation among voters that the plan is not just a Wall Street bailout but a critical rescue package for the entire US economy.

The calls from constituents railing against the Bill eased off after the turmoil that followed Monday’s vote. “It’s completely in the other direction now,” a spokesman for John Boehner, the Republican House Minority Leader, said.

Mr Dodd said earlier that Monday’s vote had sobered up some House members: “I’m told a number of people who voted ‘no’ yesterday are having serious second thoughts about it.”

The Senate version, aimed at winning over just 12 extra House Republicans and Democrats needed to reverse Monday’s defeat, contains more than $100 billion of tax breaks, including relief for businesses — popular with Republicans — and help for more than 20 million middle-class taxpayers to avoid higher levies under the alternative minimum tax.

To calm voter fears of bank collapses, the Senate plan would also increase federal insurance for deposit accounts, from $100,000 to $250,000, a move backed by Mr McCain and Mr Obama.

At its heart the Bill remains the same — a plan to allow the US Government to spend $700 billion to buy up the financial sector’s toxic, mortgage related assets — which 133 Republicans and 95 Democrats could not vote for on Monday.

While the new provisions might make the Bill more attractive to some House Republicans, it also risks losing critical Democratic “yes” votes from Monday.

Aides in both parties cautioned that the Democratic “Blue Dog” caucus in the House, many of whom backed the plan on Monday, might now oppose it because of the tax breaks included in the Senate proposal.

The “Blue Dogs”, a bloc of 47 fiscally conservative Democrats, have always opposed the tax breaks included in the new Senate version, unless they are paid for by tax increases in other areas. Such “pay as you go” measures are not included.

In a sign of dysfunction between the Senate and House Democratic leadership, Nancy Pelosi, the House Speaker, appeared to have been taken by surprise by the Senate plan, which was introduced by Harry Reid, the party leader in the upper chamber. She released a lukewarm response. “The Senate will vote . . . and the Congress will work its will.”

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