Amid stunning new job losses and the latest bank failure, key senators and the White House reached tentative agreement last night on an economic stimulus measure at the heart of Barack Obama’s recovery plan.

Two officials said the emerging agreement was for a bill with a $780bn (£527bn) price tag, but there was no immediate confirmation.

The tentative agreement capped a tense day of back-room negotiations in which Senate majority leader Harry Reid, joined by White House chief of staff Rahm Emanuel, sought to attract the support of enough Republicans to give the measure the needed 60-vote majority.

Officials strongly suggested that senator Edward M Kennedy’s vote would be needed to assure passage. The Massachusetts Democrat, battling a brain tumour, has been in Florida in recent days and has not been in the Washington DC since suffering a seizure on inauguration day more than two weeks ago. The senator’s office did not comment.

Under Senate rules, a senator must be in the chamber to vote. Reid met privately in the Capitol with members of his rank and file to present the proposed deal.

At $780bn, the legislation would be smaller than the measure that cleared the House of Representatives on a party-line vote last week. It also would mean a sharp cut from the bill that has been the subject of Senate debate for a week. That measure stood at $937bn.

Beyond the numbers, though, any agreement would mark a victory for the new president and would keep Democratic leaders on track to fulfil their promise of delivering him a bill to sign by the end of next week.

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