The US Senate has approved the Bush administration’s $700 billion plan to rescue the country's financial system.

Senators, including Presidential candidates Barack Obama and John McCain, backed the measure in the 74-25 vote in favour.

The vote will add pressure on Congressmen in the House of Representatives to vote for the measure on Friday. Earlier this week, members of the House threw out a $700 billion package, with many lawmakers objecting to the idea of US citizens bailing out highly-paid Wall Street bankers for what they regard as having taken unwise financial risks. Critics fear the bailout will delay, but not avoid, a harsh adjustment in the financial system.

US President George Bush praised senators for the vote. "I applaud the Senate for its strong bipartisan vote in favour of the financial rescue plan,” he said. “The American people expect – and our economy demands – that the House pass this good bill this week and send it to my desk."

In a move intended to shore up confidence in banks, the legislation would give the US’s Federal Deposit Insurance Corporation the unlimited ability to borrow from the Treasury for a temporary period.

The US Senate vote failed to cheer Asian markets. The Nikkei-225 index was down 1.9 per cent late in the Tokyo session, according to Bloomberg.

European policymakers are closely watching the US rescue package’s fate. In Ireland this week, the government agreed to protect bank deposits, a move that potentially puts Ireland at odds with European Union rules outlawing state aid to private sector industries.