AN EMERGENCY bailout plan for the three big Detroit car manufacturers could be passed into law later this week as Democrats in Congress and the Bush administration moved towards agreement on the proposal yesterday.

White House spokesperson Dana Perino said yesterday that the administration and Democrats in Congress were close to agreeing details of the plan, which would provide $15 billion (€11.6 billion) in emergency funds for General Motors, Ford and Chrysler.

"It sounds like we have agreement on those basic principles that would be required for a bill that the president could sign," she said. "If they want to work with us, we'll meet them halfway."

House financial services committee chairman Barney Frank said Congress and the Bush administration have overcome their most important differences over the bailout.

"I do believe that there will be an agreement announced by the end of today and that before the week is out we'll have sent to the president's desk and he would have signed a short-term loan," Mr Frank told CNBC.

President Bush has insisted that the car makers should only receive public funds if they produce a detailed plan to show that they are viable in the long term. The White House would like the bailout to be overseen by a single official, appointed by the president, who would have the power to demand immediate repayment of the loans and force the companies into bankruptcy if they fail to restructure.

Democrats favour an oversight board composed of cabinet secretaries from the departments of Treasury, Energy, Labour, Commerce and Transportation and the Environmental Protection Agency, led by a "car czar" appointed by the president.

In return for the loans, the car manufacturers would have to agree to limit executive pay, to stop paying dividends, to give the government a share of future gains and promise that taxpayers would be repaid before any other shareholders.

President-elect Barack Obama said this week that the three car manufacturers would have to undertake a radical overhaul of their businesses in return for help from the taxpayer.

"They're going to have to restructure and all their stakeholders are going to have restructure," he said.

"Labour, management, shareholders, creditors - everybody is going to recognise that they do not have a sustainable business model right now, and if they expect taxpayers to help in that adjustment process, then they can't keep on putting off the kinds of changes that they, frankly, should have made 20 or 30 years ago."

Under the Democrats' plan, the companies could get emergency loans at the beginning of next week. By the New Year, the "car czar" would write guidelines for restructuring and if the car makers had not done enough to reform by February 15th, 2009, he could recall the loan.

General Motors yesterday rejected a call by Senate banking committee chairman Chris Dodd for the company's chief executive Rick Wagoner to step down.

"GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time," spokesman Steve Harris said.

The United Auto Workers union said yesterday that it wants a seat on General Motors' board and help for laid-off workers in return for concessions on pensions. The union said last week it was revising the contribution schedule for the retiree-health funds known as Voluntary Employee Beneficiary Associations and suspending jobs banks, which enabled members to receive 95 per cent of their take-home pay while laid off for extended periods.