After leading Republicans overwhelmingly backed legislation on Wednesday aimed at blocking the deal, and with Mr Bush facing the most serious Republican revolt of his presidency, Dubai Ports World issued a statement last night saying that it would give up its entire stake in the six US ports.

Although details were not revealed, DP World, a state-run company based in the United Arab Emirates, said that it would transfer all interest in US port operations to an American-based company. But the company’s overall purchase of P&O, the British company that operates the US ports, will proceed.

Although some Democrats continued to express scepticism about the announcement, it was likely to appease enough Republicans to defuse a political crisis for Mr Bush in Washington. He had promised to veto any legislation that blocked the deal, but was faced yesterday with mutiny in both the Senate and the House of Representatives.

Next week the House was set to pass an amendment blocking the deal, and last night enough Senate Republicans defied their leadership to vote 51-47 to consider Democrat legislation aimed at derailing the takeover. Mr Bush had been determined to see the deal proceed because he was determined to deflect accusations within the Middle East of American xenophobia. He was also anxious not to alienate a moderate ally in the region that plays host to US military bases.

Although the announcement is likely to save Mr Bush from an imminent showdown with his party, it is unlikely to be viewed sympathetically in the UAE or in the wider Middle East. In essence, it appeared last night that a Republican rebellion, based on claims that an Arab company taking over control of the US ports was unacceptable, had won the day, forcing DP World, and by implication Mr Bush, to back down.

Signalling that the company’s move would defuse the Republican rebellion against Mr Bush, a leading Republican critic of the deal, Peter King, said that he and others would wait to see the details. “It would have to be an American company with no links to DP World, and that would be a tremendous victory.”

Charles Schumer, a Senate Democrat from New York, said: “This is a promising development, but the devil’s in the details. Those of us who feel strongly about this issue believe that the US part of the British company should have no connection to the United Arab Emirates or DP World.”

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