ATLANTA, Sept 30 (Reuters) - The failure of a massive Wall Street bailout bill and a steep fall in the stock market was a price worth paying to stand up for principle, some conservatives said on talk radio shows on Tuesday.

Conservatives strongly oppose the rescue plan proposed last week by U.S. President George W. Bush, arguing that it amounts to government intervention in the free market and would misspend taxpayer money to help big banks.

They also say that Congress will live to regret passing the $700 billion bill so hastily and more time needs should be spent on a search for a solution that adheres to conservative ideals.

“I’m not particularly distressed that the bailout bill did not pass. I want to see this thing (the bill) flesh itself out a little over a period of days,” said talk show host Neal Boortz, who describes himself as a libertarian.

U.S. lawmakers in the House of Representatives rejected the package after a majority of House Democrats supported it but the majority of House Republicans opposed it.

The vote came as a shock to many and prompted one of the biggest plunges in stock prices in Wall Street history with all sides blaming each other for a failure to reach consensus.

While conservatives said they recognized the seriousness of the market’s fall, they would hold fast to their principles that on the economy include low taxes, small government and fiscal responsibility.

“I shouldn’t say this, but I’m going to say it anyway. Screw the market! .... OK, I’ll take that back, not screw the market but let me tell you something,” said conservative talk show host Rush Limbaugh as part of his analysis of Monday’s events.

“When the government fails to pass a socialism bill and the market goes south, let it go south. I don’t want to pass a socialism bill just to protect the stock market,” said Limbaugh, the most popular of the talk show hosts.

WANING POPULARITY

In an attempt to put further pressure on Congress when it reconvenes later in the week, Bush said on Tuesday the U.S. economy was depending on decisive action from the government or the economic damage could be “painful and lasting.”

But part of the problem for some conservatives was a lack of confidence in the president they once saw as a champion of their cause for his commitment to tax cuts and his firm response to the 9/11 attacks.

“I don’t trust you (Bush) and when you start screaming now of dire consequences if we don’t get a bailout bill, I don’t trust you. I need convincing and apparently there are a lot of members of Congress who feel the same way,” said Boortz in a view echoed by several of his listeners.

Callers also said they did not appreciate what they saw as scare tactics used by Bush and Treasury Secretary Hank Paulson.

“It almost sounds like they are demagoguing and preaching that the sky is falling, which makes me skeptical,” said one caller.

Tens of millions of conservatives tune in to AM talk radio and trust its nationally syndicated hosts over media outlets they say have a liberal bias.

Several of the hosts say they are engaged in a long struggle to persuade the Republican Party and the country to return to its conservative roots and they see the bailout bill as an important trial of strength. (Editing by David Wiessler)