US President George W Bush says the House of Representatives rejection of the $700bn rescue plan for Wall Street was disappointing.

However, he stressed it was not the end of the legislative process.

Mr Bush said it was a critical moment for the US economy and conditions would get worse without action. He said Congress must act, adding he was confident it would deliver.

Following the US President's address from the White House, Wall Street shares rose higher, with the Dow Jones leaping 485.21 points, or 4.68%, to 10,850.66.

Officials from the Bush administration and senior US Republican and Democratic politicians are to continue negotiations to try to bring forward legislation to ease the financial crisis on Wall Street.

Congress will not sit today in observance of the Jewish New Year Holiday, however US Treasury officials are expected to lobby Congressional leaders in an attempt to rescue yesterday's failed bill.

Last night, Treasury Secretary Henry Paulson said the bailout plan was ‘too important to simply let fail'.

European Trade Commissioner Peter Mandelson said Congress had taken leave of its senses and that the US banking system would have to re-invent itself.

Meanwhile, British Prime Minister Gordon Brown said he had sent a message of support to President Bush stressing the importance of taking decisive action.

Last night, the Dow Jones closed down just under 7% or 778 points - the largest one-day point drop on record.

This loss of confidence has now spread to the markets in the Far East as well. Shares in Japan, Singapore and Seoul have experienced steep falls.

The price of gold rose strongly while the value of the dollar and the price of oil both fell.