Washington  - The US Senate on Thursday agreed to release the second half of a 700-billion-dollar bail-out package passed last year to keep the finance industry afloat.

Some lawmakers had tried to block the second 350 billion dollars from being approved, which would have put Congress on a collision course with president-elect Barack Obama's incoming administration.

Obama, who takes office on Tuesday, has reportedly threatened lawmakers that he will use his first veto if Congress failed to appropriate the funds. The House will take up the bill next week.

In a vote Thursday, 52 senators voted to release the funds, against 42 votes to block it.

Both Democrats and Republicans had expressed hesitancy about releasing the remaining 350 billion dollars of the controversial programme.

Many legislators complained the first half was invested by the Bush administration to shore up struggling banks without unblocking credit access or helping homeowners that have suffered a record number of foreclosures. dpa