Bank of America, the owner of troubled investment bank Merrill Lynch, is looking to pay back some of the billions of dollars in federal bailout aid it has received in an effort to get out from underneath the US Government's thumb, reports said today.

Meanwhile, the Obama administration wants it to pay about $500 million (£306 million) to terminate a tentative pact in which the US agreed to share losses on certain Bank of America assets, The Wall Street Journal reported.

Several banks, including JPMorgan, Goldman Sachs and Morgan Stanley, have already repaid aid they received under the Troubled Asset Relief Program, or TARP. Doing so removed those firms from having their executive pay deals approved by Kenneth Feinberg, the Obama administration's pay czar. Bankers worried that the pay rules put them at a competitive disadvantage in retaining talented employees.

Bank of America is awaiting Feinberg's approval of its 2009 executive pay packages.

Bank of America is not said to be looking to pay back all of the $45 billion it received in TARP aid at once but may give back the $20 billion it received in January to help it absorb Merrill Lynch.