WASHINGTON (REUTERS) - Democratic and Republican leaders in the United States Senate have resumed negotiations on legislation to avert a default and to reopen shuttered federal agencies after attempts in the House of Representatives failed on Tuesday.

Mr Don Stewart, a spokesman for Senate Republican leader Mitch McConnell said: "Given tonight's events, the leaders have decided to work toward a solution that would reopen the government and prevent default. They are optimistic an agreement can be reached."

A spokesman for Senate Majority Leader Harry Reid also said the two leaders have "re-engaged" and "are optimistic that an agreement is within reach".

Neither spokesman gave a likely timetable for reaching a deal.