The race is on. Congressional leaders and White House officials were last night beginning a marathon session to seal the deal on the US Treasury's proposed $700bn (£377bn) bail-out before the markets open on Monday.

Some analysts have suggested that if an agreement is not reached by close of play tomorrow night, then come Monday morning stock market panic buttons around the globe will be pushed. One less-than-cheerful expert suggested London's FTSE could take a 1000-point hit.

The rhetoric has been apocalyptic with President George W Bush, in one of his darker moments, apparently declaring: "If money isn't loosened up, this sucker is going to go down." The sucker, of course, being the US economy.

At one surreal moment, Hank Paulson, the US Treasury Secretary, got on one knee to beg the US Congress not to spook the financial markets, which could scupper the bail-out deal. Nancy Pelosi, Speaker of the House, quipped: "I didn't know you were Catholic."

Yesterday morning as politicians and officials went into closed session to sort out the mess, President Bush appeared, albeit briefly, at the White House to give an upbeat update.

With a deal of understatement, he told reporters: "The legislative process is sometimes not very pretty but we are going to get a package passed.

"We will rise to the occasion," he declared. "Republicans and Democrats will come together and pass a substantial rescue plan."

For a time on Thursday, things were looking up. News outlets reported a deal was in the bag and stock markets rose.

However, Republicans were far from convinced. The problem was that if the bailout went ahead, then, in essence, it was the American taxpayer who was saving the skins of those bad guys on Wall Street - the ones who got everybody into this mess in the first place.

Republican leader John Boehner told Pelosi that "serious consideration" had to be given to a radically different proposal that provided no US Government money up front for a financial rescue.

"If such consideration is not given, a large majority of Republicans will not support the rescue plan," he insisted.

As the hours of uncertainty ticked by the blame game began to unfold. Harry Reid, the Democratic leader in the Senate, suggested the arrival on the scene of John McCain, had not helped.

He noted how on Thursday there had been a basic agreement in place and then "guess who came to town and then that completely fell apart".

Reid added: "John McCain did nothing to help. He only hurt the process."

Even McCain appeared to acknowledge things were not quite going as well as he had hoped. In a statement, he said a bipartisan White House meeting - supposedly meant to showcase his leadership skills on the economy - had descended into a "contentious shouting match".

The Democrats accused McCain of grandstanding; that he had suspended his presidential campaign simply to rush to Washington in the hope of claiming credit for a deal being clinched.

Reid claimed that since McCain's arrival, the House Republicans "have not been involved in this and I hope they become more engaged", adding that they were "going to have to become more realistic" about their demands.

Yet Republican Scott Garrett pointed out: "At the end of the day, it's a $700bn bailout. It puts the taxpayers on the hook."

And his colleague Tim Murphy added: "Does it protect the little guy? We're asking taxpayers to be on the line. I don't want taxpayers to be the ones on the line."

Last night Reid struck a more optimistic note, saying: "If people put their heads together...we can have this done by midnight tonight, start drafting it all day tomorrow and vote on it Sunday."

But as the hours tick by, the world is holding its breath.