WASHINGTON - THE chairman of the House Financial Services Committee declared Friday that an agreement on legislation to relieve a spreading financial crisis depends on House Republicans 'dropping this revolt' against President George W. Bush.

Rep. Barney Frank said leading Democrats on Capitol Hill were shocked by the level of divisiveness that surfaced at a White House meeting on Thursday, not long after key congressional players of both parties declared they'd achieved the broad outlines of an agreement on a bill implementing the administration's proposed US$700 billion (S$997 billion) bailout plan.

Mr Frank said he did not think that Democrats were going to see a substantially different proposal from the plan the administration has been trying to sell to lawmakers and which had been the focal point of closed-door talks for days.

'It's an ambush plan,' he said.

Participants in a meeting late on Thursday afternoon that Mr Bush had at the White House with congressional leaders and presidential candidates John McCain and Barack Obama said it descended into arguments.

'I didn't know I was going to be the referee for an internal GOP (Republican) ideological civil war,' Mr Frank, a Massachusetts Democrat, said on CBS's 'The Early Show'.

Sen. Richard Shelby, an Alabama Republican who appeared on the same show, said many Republican lawmakers dislike the proposal that has been pushed on the administration's behalf principally by Treasury Secretary Henry Paulson.

'Basically, I believe the Paulson proposal is badly structured,' Mr Shelby said. 'It does nothing basically for the stressed mortgage payer. It does a lot for three or four or five banks.'

The political infighting happened even as Washington Mutual Inc, one of the country's largest banks, collapsed under the weight of its bad bets on the mortgage market. The Federal Deposit Insurance Corp seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

Even for a party whose president suffers dismal approval ratings, whose legislative wing lost control of Congress and whose presidential nominee trails in the polls, Thursday was a remarkably bad day for Republicans.

A White House summit meeting called principally with the purpose to seal the deal that Mr Bush has argued is critical to stabilizing frenzied markets and reassuring the nervous American public descended into arguments.

The meeting revealed that Bush's proposal had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats.

Mr Paulson begged Democratic participants not to disclose how badly the meeting had gone, dropping to one knee in a teasing way to make his point according to witnesses.

And when Mr Paulson hastily tried to revive talks in a nighttime meeting near the Senate chamber, the House's top Republican refused to send a negotiator.

'This is the president's own party,' Frank said at the time.

'I don't think a president has been repudiated so strongly by the congressional wing of his own party in a long time.'

The presence of Mr McCain and Mr Obama at the White House session fed the aura of urgency - but also the personal intensity - of the proceedings.

Asked on Friday whether an agreement appeared likely by the end of the weekend, Mr Frank said: 'It depends on the House Republicans dropping this revolt against the president and cooperating in trying to amend the plan and at this point I can't give you a yes or no because it's up to the House Republicans and their war, I think, on behalf of Sen. McCain, with President Bush.'

Sen. Lindsey Graham, a Republican from South Carolina, said Mr McCain was a calming influence.

Mr McCain's leadership in the negotiations 'is to try to stop us from yelling at each other, announcing deals that don't exist, to actually talk to the House and the Senate and get agreement and then go to the press,' Mr Graham said. 'Try to create organisation out of chaos. Three days ago (Sen.) Harry Reid said there'll be no deal without John McCain's support. Nothing happened for three days. John comes back to town, now he's being criticised for coming back.' -- AP