The White House did not go quite so far, saying it has made "very good progress."

The measure could see a House of Representatives' vote later Wednesday and be enacted by week's end.

It would create a government 'car czar' to dole out the loans, with the power to force the carmakers into bankruptcy if they didn't cut quick deals with labour unions, creditors and others to restructure their businesses and become viable.

Congressional Republicans, left out of negotiations on the package, are expressing grave reservations and may seek to block it.

Senator David Vitter, a Republican, promised to try to delay a final Senate vote for days.

He said the package has an 'ass-backwards' approach to curing what ails the US auto industry.

Nevertheless, Democratic leaders were confident enough that a bill could advance that they set a procedural vote for the House floor later Wednesday.

Even still, Senator Mitch McConnell, the Republican leader, said that his side had not seen the measure yet and would not agree to votes on the measure Wednesday.

"Republicans will not allow taxpayers to subsidise failure," McConnell said, although he added that the auto situation would be addressed by the end of the week.

The congressional officials revealed agreement on a bill only on grounds of anonymity because the deal has not been formally announced.

At the White House, Deputy Chief of Staff Joel Kaplan said the administration and Congress have made "very good progress on a conceptual agreement."

"We'll be talking retail to individual senators to win their support," said Kaplan, who said he expected President George W. Bush to lobby Republicans to vote for the package.

Kaplan said it was critical that the legislation have a clear definition of what is long-term viability for the companies.

A breakthrough came when Democrats agreed to scrap language - which the White House had called a poison pill - that would have forced the carmakers to drop lawsuits challenging tough emissions limits in California and other states, said congressional aides.

Environmentalists already were livid that the measure draws the emergency loans from an existing loan program to help carmakers retool their factories to make greener cars.

Kaplan also said the president was dispatching Chief of Staff Josh Bolten to Congress to make the case for the legislation with sceptical Republicans.

AP