Federal Reserve chairman Ben Bernanke and Treasury Secretary Hank Paulson today ratcheted up the pressure on Congressmen to accept the $700billion (£382billion) bailout plan.

Arch Republican Paulson's proposal to load the duff loans made by banks on to US taxpayers has to gain approval from the Democrat-led Congress.

Politicians there are wary of handing such vast liabilities on to the taxpayer. Sensitivities are running particularly high with an election looming and growing opposition to the concept of "Main Street bailing out Wall Street".

Bernanke and Paulson today warned Congress that failure to pass the plan would threaten markets and the US economy.

Markets have been wobbling this week amid concerns the plan, which was met with jubilation and massive share-price rises last Friday, may hit the buffers.

Bernanke's statement to the Senate Banking Committee urged action, saying: "Global financial markets remain under extraordinary stress. Action by Congress is urgently required to stabilise the situation and avert what could otherwise be very serious consequences for our financial markets and our economy."

Paulson said: "We must now take further, decisive action to fundamentally and comprehensively address the root cause of this turmoil."

Democrats still criticised the size, scope and lack of detail in the plan. However, they are thought to be inching towards agreeing a deal.

Shares in London fell again with the FTSE 100 index tumbling 71.63 to 5164.63 despite a modest early rally by New York's Dow Jones Average.

Stock markets in Europe and Asia were also on the slide as euphoria over the proposed bailout of the US banking system evaporated.

Matt Buckland of CMC Markets said: "There's clearly a lot of sentiment involved. We are seeing a step change in the financial landscape as we have come to know it, and as this is played out perhaps further volatility in inevitable."

The Bank of England pumped another $40billion into the money markets today in a bid to encourage lending between nervous banks but it did little to help sentiment.