Massachusetts Democratic Rep Barney Frank, chairman of the House of Representatives Financial Services Committee and a participant in the afternoon White House meeting, said negotiations could be seriously set back.
'House Republicans, in some kind of arrangement, with McCain went off to wherever. I don't know whether they?re ready to negotiate this. Their thing was some totally different mortgage insurance plan...that would clearly delay this for a week or more,' Mr Frank told reporters.
'We're waiting to hear from the House Republicans,' said Mr Frank, who has played a key role in talks over a Bush administration proposal to spend US$700 billion (S$996 billion) in taxpayer money to buy up bad mortgage debt from banks.
A group of conservative House Republicans on Thursday offered a mortgage insurance plan as an alternative to the Bush plan, which has encountered criticism on Capitol Hill.
The conservative group's plan calls for the US government to offer insurance coverage for the roughly half of all mortgage-backed securities that it does not already insure.
The Treasury Department, they said, should charge premiums to holders of those securities to finance the insurance.
They also called for temporary tax cuts and regulatory relief for businesses. In addition, they said, financial institutions participating in their proposed programme would have to disclose more about their mortgage asset holdings.
Democratic Rep Henry Waxman said Mr McCain appears to have embraced the proposal from conservative House Republicans including Wisconsin's Paul Ryan, Texas' Jeb Hensarling and Virginia's Eric Cantor.
'It seems like (McCain) embraced Jeb Hensarling's position ... It's a completely different approach,' Mr Waxman said. 'It's hard to imagine where we go from here.'
Mr Frank said his committee held a hearing on Wednesday where witnesses included Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, the two officials who have championed the Bush administration's massive bailout plan.
Mr Frank said Mr Hensarling attended the hearing as a committee member, 'but he never mentioned an alternative plan.'
Speaking to reporters elsewhere in the Capitol, Senate Banking Committee Chairman Christopher Dodd complained that up until Thursday's White House meeting, no Republicans brought up an alternative plan for the Wall Street bailout, including during meetings and Senate hearings.
Senate Majority Leader Harry Reid said he was 'a little stunned' when he heard talk at the White House about a completely new plan drawn up by House Republicans. -- REUTERS