New bid to end US debt-ceiling deadlock

US Republicans are trying for a third straight day to pass a Bill on raising the country's borrowing authority and avert a potentially devastating government default.

Meanwhile the Senate decided to push ahead with its own rival version, as the clock ticks closer to next week's deadline.

The leader of the Republican-led House of Representatives, Speaker John Boehner, suffered a stinging setback on Thursday when, for a second consecutive day, he had to postpone a vote on his proposal to raise the borrowing cap, known as the debt ceiling, while cutting federal spending by nearly one trillion dollars.

With the House measure stalled, the Senate's Democratic leader, Harry Reid, said today that he will move ahead with his own debt-limit bill.

Reid said his plan would cut $2.5 trillion (€1.74 trillion) from the deficit over a decade and is likely to be the last chance to save the nation from default with a Tuesday deadline looming.

He invited his counterpart, Senate Republican leader Mitch McConnell, to negotiate with him.

Reid's move sets up a potential showdown vote in the Senate on Sunday.

The divided US government has struggled to head off a default threatened after Tuesday, when the Treasury would be left without the funds needed to pay its bills.

Concerns about a US default continued to reverberate around markets today, with stocks down again.

While investors have been jittery for weeks, the inability this week of Republicans to even manage to get their own party to agree on a plan has reinforced those fears with just days to go.