The $US700 billion bailout of the American financial system is official and has been signed off by President George W Bush, who launched the rescue plan a fortnight ago.

The House of Representatives voted 263-171 in favour of the bill after it was earlier passed by a large majority in the Senate but rejected in a shock Congress vote on Monday.

The revised bill added a range of sweeteners and tax breaks – some of them relevant to the financial crisis but others clearly not.

President George W Bush’s plea for a renewed effort on a financial rescue plan has helped rally Wall Street stocks overnight, setting the scene for a recovery in New Zealand stocks today.

Mr Bush says his advisers will begin working with Congress immediately on a new solution after the shock defeat of the $US700 billion bailout.

If action is not taken, he says, the "economic damage will be painful and lasting.