WASHINGTON (AP) — An administration official said yesterday the overhaul of the government's $700 billion financial rescue programme is likely to include a partnership with the private sector to buy troubled assets.

The official said the plan would use government money to support private sector purchases of bad assets that are weighing on banks' balance sheets and keeping them from resuming more normal lending.

The official spoke on condition of anonymity in advance of the proposal being released.

A Treasury Department spokeswoman said the revamped programme was basically done with only "minor tweaks" occurring yesterday.

Treasury Secretary Timothy Geithner will give a speech today at the Treasury Department unveiling the new programme. The speech originally had been scheduled for yesterday but was delayed partly to allow Geithner to help gain Senate approval of the administration's massive economic stimulus bill.

Lawrence Summers, head of the National Economic Council, said on Sunday that the administration had received a number of proposals on how the private sector could participate in the solution to the banking crisis.

"It can't all be private capital ... not given the size of the financial mess we have inherited," Summers said in an interview on Fox News on Sunday. But he said the administration believed the private sector could play a significant role with the right types of government guarantees.

"With the right strategic approaches, Secretary Geithner believes that we can bring in substantial private capital, and that's something we all ought to be able to agree on, that where we can catalyse private capital, that's a better root to solving this problem than government resources," Summers said.

The government effort to support private sector purchases of banks' troubled assets would be just one element of a major overhaul of the troubled bailout program, which has come under heavy criticism for distributing billions of dollars with few requirements on how banks would use the money.

The Bush administration, led by then-Treasury Secretary Henry Paulson, committed the first $350 billion of the $700 billion programme, leaving the final half for the Obama team. While many banking experts believe billions more eventually will be needed to deal with the worst financial crisis in seven decades, the new plan will not seek additional support from Congress at this time, according to congressional and industry officials who are in contact with the administration.

The revamped plan is expected to continue to rely heavily on capital injections into banks although with more strings attached in terms of caps on executive compensation and enhanced monitoring to make sure banks use the money to increase lending.

The administration has said it will devote up to $100 billion of the remaining $350 billion to programmes to combat a rising tide of mortgage foreclosures. Geithner was expected to reveal some of those efforts today.

The overhauled programme also is expected to feature a significant expansion of a Federal Reserve programme designed to unclog lending to consumers and small businesses.

This was a major screwup by bush and clinton adminstrations.