The US Vice-President’s remarks came a month after Hank Paulson, the Treasury Secretary, began to meet bank executives to discuss regulatory concerns, and appeared to confirm a broader shift in American policy towards a watering down of the Sarbanes-Oxley rules.

In an interview with CNBC, the business news television channel, Mr Cheney said: “I think you can make a case that Sarbanes-Oxley went too far. The fact of the matter is, the things — when we had, for example, Enron and WorldCom, the problems that developed from the standpoint of those companies, those activities were illegal before there was any additional regulation put in place.”

The Vice-President went on to indicate that he would be “happy to work with” Democrats on relaxing some Sarbanes-Oxley rules if they were to triumph in the midterm congressional elections next month. However, it is not certain that all Democrats see eye-to-eye with the emerging Republican consensus.

The Sarbanes-Oxley Act was introduced in 2002 in the wake of the Enron and WorldCom accounting scandals, but it will become more vulnerable from November because the Act’s co-authors — the Democrat Senator Paul Sarbanes and the Republican Michael Oxley — are stepping down.

Separately, Christopher Cox, chairman of the US Securities and Exchange Commission, said yesterday that Section 404 of Sarbanes-Oxley, which requires companies to disclose more about their internal financial controls, and their outside auditors to issue opinions on the controls, has been costlier than expected.

“The law, in some respects, has been too expensive for investors,” Mr Cox told reporters at a conference on corporate accounting of share options. The SEC chief said he expected to receive before the end of the year a recommendation on how to fine-tune Section 404.

Proposals expected to emerge from the effort include possibly limiting the liability of accounting firms for work they do on behalf of clients, forcing prosecutors to target individual wrongdoers instead of companies, and scaling back shareholder lawsuits.

There is also pressure from corporate lobby groups, headed by the newly formed Bush-lined Committee on Capital Market Regulation, to limit over-zealous state prosecutions by figures such as Eliot Spitzer, the New York attorney- general, and abusive class-action lawsuits by investors.

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