There are two big factors working in Henry Paulson's favour. The first is that nobody quite understands how the US Treasury Secretary's $700 billion (£376.8 billion) bailout fund will work; the second is that wild swings on the Dow Jones industrial average provide a terrifying reminder of the perils of delaying a rescue plan.

With only four concrete things known about the fund, Democrats, Republicans and Wall Street have little to oppose specifically, but plenty for which to lobby.

The only certainty is that Mr Paulson has proposed that the fund would not spend more than $700 billion of taxpayers' money and that President Bush wants the go-ahead to raise the national debt to $11.3 trillion to pay for it. We also know that the broad principle of the fund is to acquire distressed mortgage-backed assets from banks and, hopefully, to sell them back to the market when the climate has improved. Third, we know that Mr Paulson wants the fund to be entirely controlled by the Treasury.

Everything else about the bailout is up for grabs. Since Mr Paulson addressed a press conference in Washington on Friday morning, Democrats, Republicans and the banks have all been lobbying and drafting their own suggested additions to the bailout scheme.

One area of contention is oversight of the fund. Mr Paulson wants the right to appoint his own fund managers to control the scheme, chosen by the Treasury, and to decide how much they would be paid.

Such a role would place the Treasury, and its Secretary, in far more powerful positions than at any time in American history. In theory, Mr Paulson could appoint Goldman Sachs, his former employer. On Sunday night, Democratic leaders discussed appointing the Government Accountability Office, Washington's auditor, to oversee the running of the fund. Republicans suggested similar scrutiny by establishing a congressional panel made up of representatives from both parties.

Charles Schumer, a leading Democrat, said at the weekend that he wanted sufficient transparency in the running of the fund to ensure that Mr Paulson appointed fund managers “without favouritism”.

Chris Dodd, chairman of the Senate Banking Committee, a Democrat, said: “This is not in any way to deprive the opportunity to act. We totally understand the gravity of the moment, but you cannot just turn over $700 billion of taxpayers' money and not insist that the taxpayer is going to be protected in this.”

A key area of anxiety about the rescue plan is how the fund will value the mortgage-backed bonds that it is set to buy from the banks. There have been leaks that Mr Paulson favours a so-called reverse auction, in which the fund would buy assets from the bank that offered the lowest price. However, such uncertainty about the way a price would be calculated is feeding into even more panic about the future of the banking sector.

At the weekend, Mr Paulson caved in to the Financial Services Roundtable, a group of America's most powerful banking and insurance chief executives. They had pushed Mr Paulson to allow some foreign banks to be allowed to dump their assets on the American taxpayer, on the ground that those eligible have significant operations in the United States and provide many jobs in the country's financial services sector. While Mr Paulson amended his draft on Sunday night, it also leaves the way open for hedge funds to sell their defunct mortgage-backed securities to Washington.

However, the main question for Mr Paulson is whether he can mute calls to include punitive measures against the banks in return for the bailout.

Two-pronged attack

Henry Paulson is under siege on all fronts. His loudest and most powerful opponents sit on either side of the political divide.

Barney Frank, above, chairman of the House Financial Services Committee, and a powerful Democrat, wants Mr Paulson's bailout to be laced with legislation to block “inappropriate or excessive” executive pay.

Mr Frank wants to empower Washington to claw back incentive-based pay that is later found to have been inappropriate. He also wants to make sure the banks that get the benefit of the bailout will help homeowners.

In other proposals, in his own separate draft, Mr Frank wants the bailout legislation to address rising foreclosures, which could include empowering bankruptcy judges to force lenders to cut interest rates on mortgages.

While some Democrats argue that banks should be forced to pay for the taxpayer bailout, other Republicans are anxious about the fact that the rescue package is effectively nationalising part of Wall Street.

From Mr Paulson's own political party, Richard Shelby, the chairman of the Senate Committee on Banking, Housing and Urban Affairs, has said that he is unconvinced by the merits

of the bailout and he has attacked Mr Paulson for jumping from crisis to crisis instead of earlier devising a more comprehensive approach to bankrupt banks and insurers.

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