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.

US senators are expected to approve a revamped $US700 billion financial bailout package after accepting tax breaks and a higher limit for insured bank deposits.

This follows the rescue plan’s narrow defeat earlier this week in the Congress, where the bill is likely to pass on its reintroduction once Senate approval is sealed.

In a shock move, US legislators have narrowly rejected the $US700 billion financial markets bailout, triggering one of the biggest falls ever on Wall Street.

As Wall Street markets ground to a halt this morning (NZ time) the Dow Jones Industrial index was down 777.68, or 7%.

Just before 7am (NZ time), the count was 228 against the bailout plan and 205 in favour, not enough to allow the bill to survive.