America's president and his top advisers have been holding talks on new ways to tackle the financial crisis after the House of Representatives rejected the Wall Street bailout plan.

The proposal would have granted treasury secretary Henry Paulson authority to buy up toxic mortgage-related assets in troubled banks in hopes of easing the flow of credit.

President George W Bush will tray to save the $US700 billion bailout.

"I was disappointed in the vote with the United States Congress on the economic rescue plan," he said.

"We put forth a plan that was big because we've got a big problem. We work with members of Congress, leaders of Congress on the way forward. Our strategy is to continue to address this economic situation head on and we'll be working to develop a strategy that will enable us to continue to move forward."

Analysts say the politicians are wary of their constituents because they face elections five weeks from now, and members of the electorate have been bombarding them with letters and e-mails opposing the bailout.

Obama urges a return to negotiating table
Presidential candidate Barack Obama has urged lawmakers to return to the negotiating table to work on a financial rescue deal and offered a new proposal he said would help attract support.

The Democratic White House contender suggested raising the limit on bank deposits guaranteed by the federal government to $US 250,000 from its current level of $US 100,000.

"One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks," Senator Obama said.

"I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan," he said.

Asian governments move to prop up markets
Asian governments from South Korea to Indonesia have stepped in swiftly to try to prop up markets that plunges in response to the developments in the United States.

In Taiwan, the president, President Ma Ying-jeou says its economic fundamentals are still good.

Malaysia's government says it's maintaining its growth forecast for the year.

India's finance minister has assured investors that market regulations will be tightened, if needed.

Hong Kong's Securities and Futures Commission warns it won't tolerate abusive practices.

Indonesia and South Korea stock exchanges say they will prohibit short selling of stocks.

Rejection wipes $US 40 billion off Australian market
The rejection of the US bailout plan has wiped more than $US 40.4 billion off the Australian sharemarket.

Our reporter Lexi Metherell says the ASX 200 has plunged 4.3 per cent after investors tore $US 1 trillion off Wall Street stocks for the first time in one session.

Financial stocks have been hard hit, but the miners have dived after big falls in commodity prices overnight.

An ANZ economist Warren Hogan says the rejection of the Wall Street rescue package has heightened fears that further slowing in the US will reduce the demand for resources.

"That's going to have a big impact on our economy eventually and of course on our resource stocks."

Rio Tinto's lost more than 11 per cent, while Westpac's dropped more than seven per cent.

The All Ordinaries index has shed 208 points to 4,631.

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