A $700bn bail-out to save the crumbling US economy was passed by the House of Representatives today.

The measure, rejected by the House on Monday, was passed comfortably this time by 263 votes to 171. Relieved traders sent the Dow Jones index up by more than 1.6% immediately afterwards.

Just before the vote Nancy Pelosi, the Democrat speaker of the House of Representatives said: "It's an important vote, it's a difficult vote. But it's a vote we must win for Mr and Mrs Jones on Main Street."

Republicans had blamed what they perceived to be Pelosi's partisan rhetoric before the previous vote for the bill being defeated by a margin of 228 to 206. On that occasion a majority of Republican representatives voted against the bill.

The rejection of the bill triggered the Dow Jones' biggest one day points drop in history. The measure was passed by the Senate on Wednesday.

The money will be used by the US Treasury to purchase toxic debts from banks in the US, thus freeing up the balance sheets of financial institutions and hopefully restoring faith in lending markets.

Following the rejection of the bill, which was proposed almost three weeks by Tresury secretary Henry Paulson, a number of amendments were made, including an increase of insurance for deposit accounts.

Presidential rivals John McCain and Barack Obama were said to be calling representatives from their respective parties right up until the vote to try to ensure the bill passed.