The Bush administration is planning to tap the $700 billion Wall Street bailout kitty to rescue the beleaguered auto industry even as the Senate rejected a $14 billion package in government loans and guarantees to the three major US auto firms – General Motors, Chrysler and Ford Motors.

The US Treasury has about $15 billion funds left in the first $350 billion round of the `Troubled Assets Relief Programme', authorised by the Congress and this can be used to offer bailout for the auto firms with some minor changes in the disbursal norms.

The White House and the Treasury decided to offer emergency aid to the three auto majors to avert bankruptcy after the Ruling Republicans themselves defeated a deal on Thursday.

Executives of the auto firms are believed to have discussed with members of Congress the extent of funds needed and ways of averting bankruptcy.

The Treasury will determine how much money will be released to General Motors, Chrysler and Ford, and on what timetable. It would also work out oversight rules needed as part of the rescue package as also the other conditions the automakers and the auto-workers' union will have to meet.

"Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," reports quoted Treasury spokeswoman Brookly McLaughlin as saying.

Democratic senators, meanwhile, had demanded that the government release money from the $700 billion Wall Street bailout fund in loans to GM and Chrysler and a line of credit to Ford, which is comparatively in a better position.

GM has sought $4 billion this month to keep paying its bills, and a total of $12 billion till March. Both GM and Chrysler are known to be close to reaching their minimum levels of cash needed to sustain their operations.

But, it is still unclear whether the powerful United Auto Workers' union would agree on the terms of bailout package, for it envisages that active workers' wages and benefits be cut to match those of workers at non-union auto factories in the US, like those of Toyota and Honda.

(Also see: Senate rejects $14-billion bailout plan for auto majors)