US Treasury Secretary Hank Paulson has committed a dramatic volte face from the Bush administration’s Wall St bailout plan to purchase toxic subprime mortgages from financial firms.

Mr Paulson announced he is refocusing on shoring up financial institutions with direct investments, shoring up markets for securitized consumer debt such as car loans, student loans and credit cards, as well as prodding banks to speed up the thaw in the country’s credit system.

Financial news organisation Bloomberg has requested the details of who the US Federal Reserve is lending its trillion dollar bailout cash to under the Freedom of Information Act, as well as suing the Fed in a bid to force disclosure.

While Fed chairman Ben Bernanke and Treasury Secretary Hank Paulson said in September they’d comply with congressional demands for transparency, to date they have refused to name a single company to receive some of the trillion dollars they have dispersed thus far.

Government bank bailouts in the US and Europe failed to stem fears of slower global economic growth and triggered a further major selloff on world sharemarkets.

Starting in Asia, the rot spread to Europe and Wall Street, where the Dow Jones index closed below 10,000 points for the first time since 2004.

It was off 800 points at its intraday low, ending down 369.88 points, or 3.6%, at 9955.50, hurt by declines in all 30 of its blue-chip components. The Dow has slid 12.8% since the meltdown of Lehman Brothers Holdings threw Wall Street into crisis in mid-September.

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 lawmakers including John McCain and Barack Obama have revived the TARP plan to unblock frozen credit markets – and Wall Street bankers, by passing the bill 74-25.

An increase in deposit insurance limits and several tax breaks, including for children and victims of recent hurricanes, appeared to clear the way for senators to approve the bill, increasing the chances of the bill being passed in the House of Representatives, or lower house of Congress.

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.