Dana Perino, President George W. Bush's spokeswoman, said it was “very likely” that agreement would be reached with congressional Democrats during the course of the day on providing General Motors and Chrysler with enough funds to keep operating for the next three months. Ford has also said it will need a credit line. During those three months the companies would work with the administration on a longer term restructuring plan.

The car companies' shares surged in anticipation of the breakthrough, with GM shares up 14 per cent and Ford by 15 per cent at midday on Monday.

Mr Obama, who at the weekend unveiled what he labelled the biggest US infrastructure investment plan for half a century, also supports congressional Democrats' stance on the Detroit Three, which would hand over long term decisions on the future of the industry to his administration and to the new session of Congress.