WASHINGTON - US congressional leaders on Sunday said they had reached the broad outline of a deal to put in place a US$700 billion (S$996 billion) financial system bailout but were awaiting details on paper before declaring it final.

'We've made great progress,' House of Representatives Speaker Nancy Pelosi told reporters after a night of marathon talks. 'We have to get it committed to paper so we can formally agree.'

Leading lawmakers had huddled with US Treasury Secretary Henry Paulson through the night on Saturday to nail down an agreement to create a massive government fund to buy up distressed debt from financial institutions staggered by failed mortgages.

Fear-wracked financial markets had lent the talks urgency and lawmakers were striving to reach a deal by Sunday before Asian markets open.

It was unclear when the House and Senate might vote on the legislation or whether any last-minute hitches might arise.

Lawmakers, however, have been hoping to vote within days.

'We think we should have an announcement sometime (Sunday) but you know we're committing it to paper tonight and our people will work all night long,' Senate Democratic leader Harry Reid said.

The legislation would disburse the funds in tranches, limit 'golden parachutes' for executives at companies participating in the program and set up an oversight board to supervise the program, which would be run the US Treasury.

'We've been working very hard on this and we've made great progress toward a deal that will work and be effective in the marketplace and effective for all Americans,' Mr Paulson said.

House Republicans, who had worried the programme would put taxpayers on the hook, won a provision that would set up an insurance programme for mortgage-backed securities.

In addition, the government will get stock warrants so taxpayers 'can gain as companies recover and as the economy recovers,' said Democratic Sen Kent Conrad of North Dakota.

'That is very significant.' Rep Roy Blunt of Missouri, the chief negotiator for House Republicans, said party members would be briefed on the terms of the deal later on Sunday after a printed draft was available for review.

'I think we are going to be able to have an announcement tomorrow but these are difficult issues,' he said.