Bush seeks to contain fallout and salvage legacy

By Matt Spetalnick

WASHINGTON (Reuters) - U.S. President George W. Bush vowed on Tuesday to revive a $700 billion (388 billion pound) financial bailout plan rejected by lawmakers, as he scrambled to contain the fallout in world markets as well as save his own troubled legacy.

Looking grim-faced, Bush stood before the cameras at the White House and insisted the rescue package was not dead a day after the U.S. House of Representatives handed him the worst legislative defeat of his nearly eight-year tenure.

With less than four months left in office, his approval ratings low and his influence dwindling, Bush was unable even to keep his own Republican party in line when the House voted the bill down on Monday, sending stock prices plummeting. More than 100 Republicans defied him and voted against the measure.

"I assure our citizens and citizens around the world that this is not the end of the legislative process," Bush said, promising redoubled efforts to save a plan aimed at curbing the worst U.S. financial crisis since the Great Depression.

He said the U.S. economy was depending on decisive action from the government or else the financial damage could be "painful and lasting."

"Congress must act," Bush declared even as shockwaves from U.S. financial upheaval continued spreading worldwide.

The White House later released a statement saying Bush had spoken to the two presidential candidates, Democrat Barack Obama and Republican John McCain, and both had agreed "this critical issue needs to be addressed."

IS BUSH'S APPEAL ENOUGH?