Washington  - The treasury secretary and head of the US central bank sought Tuesday to convince a key Senate panel to act rapidly and adopt a mammoth White House rescue plan for the nation's finance system.

Members of the Senate banking committee expressed anger at the prospect of being forced to act by week's end and outrage at bailing out Wall Street risk takers. But they also acknowledged the urgency of the issue.

US President George W Bush is asking Congress to pass an unprecedented 700-billion-dollar programme to buy up bad mortgage debts and related securities that have brought the banking system and the nation's economy to the brink of ruin.

But battle lines were drawn as legislators demanded oversight, insisted that taxpayers receive ownership of shares and called for limits to be placed on the compensation of executives at companies benefiting from the bailout.

They also want long-term regulatory reform to prevent a similar crisis from happening down the road.

Bush's financial gurus, Treasury Secretary Henry Paulson and Federal Reserve head Ben Bernanke, pleaded for rapid passage without any add-ons or limitations by Congress.

They said speed was urgent to unblock the credit freeze that has resulted from the combination of risky packaging of mortgage debt by Wall Street and unwise and unregulated bank loans to people who could not afford their homes.

"The financial markets are in a quite fragile condition," Bernanke said. "Credit is not being provided, non-financial companies cannot finance themselves overnight ... jobs will be lost ... more homes will be foreclosed on."

Paulson acknowledged that the mechanics of buying what many senators called "toxic assets" would take the country into unchartered territory and would involve a great deal of trial and error.

But he opposed attaching limits on executive compensation and other add-ons because his intent is not to punish companies on the brink of collapse, but rather to convince a broader range of financial firms that are on more solid ground to participate, shed bad investments and avoid future financial ruin.

"Rather than going to a group of troubled institutions that need to sell," the Treasury Department will be trying to convince a "broad range of institutions to willingly" participate, Paulson said.

Committee chairman Chris Dodd, a member of the majority Democratic Party, questioned the wisdom of throwing 700 billion dollars into the market without any quid pro quo from the firms.

"After reading this proposal, I can only conclude that it is not just our economy that is at risk, but our Constitution as well," Dodd said.

Noting that foreclosures were forcing 9,800 families out of their homes every day, Dodd called the crisis "an extraordinary and perilous moment in our nation's history."

Senators said their phones had been ringing off the hook from constituents angry about the prospect of their tax dollars bailing out highly-paid risk takers on Wall Street.

"One man drove seven hours to get here today," said Senator Sherrod Brown of Ohio. "He wanted to know why we are rushing to bailout companies whose leaders got rich by gambling with other people's money."

Senator Jim Bunning, a Kentucky Republican, said the plan would "take Wall Street's pain and spread it to the taxpayers."

Bernanke and Paulson last week told Congress that the country was "perhaps days from the collapse of financial markets" unless it adopted the 700-billion-dollar plan, according to one senator.

The Senate panel asked about the rush to adopt such a massive plan in just a week before elections' recess, and wondered what would happen if Congress failed to act.

Bernanke said that without action, the crisis would be a "major drag on the economy and greatly impede the ability of the economy to recover" from its current malaise.

Inaction would affect the entire country including people who have jobs, people "getting ready to retire" and people sending children to college.

The 700 billion dollars represents about 5 per cent of all outstanding mortgages in the country, the officials said.

The year-long financial crisis peaked last week as Lehman Brothers declared bankruptcy, Merrill Lynch was swallowed up by Bank of America and the US government bailed out insurance giant American International General for 85 billion dollars.

Stock shares fluctuated wildly, up to 4 per cent and more every day, forcing Paulson and Bernanke to insist on urgent action to rescue the finance system as well as the economy.

The intervention would be the largest intrusion in capital markets since the Great Depression of 1929, and would contravene Bush's own Republican free-market philosophy.

Over the past year, the Federal Reserve and government have pumped hundreds of billions of dollars into the finance markets, backed a 30-billion-dollar loan for the purchase of Bear Stearns and taken over the mortgage giants Freddie Mac and Fannie Mae, which could cost up to 200 billion dollars.

"The landscape of our nation's economy has been radically reshaped by the United States government over the course of just a few days in a totally ad hoc manner," chairman Dodd said. "The United States government effectively runs, supports or outright owns vast lots of the financial sector." (dpa)