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Senate leaders hoped the 74-25 vote would send a strong message to the lower House of Representatives, which rejected an earlier version of the bail-out plan on Monday and sent US stocks into a free-fall.

Government officials and congressional leaders said government intervention was critical to keep credit flowing from banks to average Americans and had warned that the US economy would not easily survive another legislative failure.

"I'm very, very happy with this vote tonight," said Majority Leader Harry Reid, the top Democrat in the chamber.

The House is expected to take up the new version Friday. It remains unclear whether the new deal - hammered out between Democrats and Republicans over the last two days - was any more capable of passing the House.

Democratic presidential nominee Barack Obama and Republican rival John McCain both returned to Washington for Wednesday's vote. Both voted in favour.

At its core, the bill involves the government taking on up to 700 billion dollars in mortgage-backed securities that have plummeted in value and decimated the balance sheets of US and European financial institutions. The money would be doled out in stages, with 250 billion dollars available immediately.

Financial institutions have sharply curbed lending to consumers and to each other amid fears about their own capital positions. Automakers reported sharp drops in US sales Wednesday as consumers found it more difficult to get approval for car loans.