In a blow to President Bill Clinton, the Republican-controlled US House of Representatives refused yesterday to give the IMF the full $18 billion (£12.1 billion) requested by the White House to fend off a global financial meltdown.

Despite panic in world markets and warnings that IMF cash reserves were depleted by bailouts in Asia and Russia, House Republican leaders rejected an amendment by Democrats that would have given $18 billion to the IMF to help it guard crisis-hit economies elsewhere. The House was to vote early this morning on whether to approve $3.4 billion for the International Monetary Fund, a fraction of the money the White House says the Washington-based lending agency needs.

The $3.4 billion included in legislation by Republican Representative Sonny Callahan funding US aid programmes around the world would pay the US share of the so-called New Arrangements to Borrow (NAB), an emergency fund to help the IMF cope with future crises.