According to the Wall Street Journal's online edition, negotiations between the US government and Citigroup have resulted in a plan - to rescue the beleaguered financial giant - which could lead to government guarantees of as much as $300 billion of Citi's troubled assets.

Citing sources close to the agreement details, the report said plan also involves a $20 billion capital injection with an 8% interest rate. Sources also said that the new entity would hold about 50 billion dollars of assets and would help the bank "cleanse its balance sheet of billions of dollars in potentially toxic assets."

The weekend talks, between the executives at the bank and the US Federal Reserve and Treasury Department officials, took place at an accelerated after the Citigroup's stock value plunged 60 percent plunge last week. The Journal said that though there were reports of the plan being unveiled late Sunday, the negotiations appeared to drag on longer than expected.

Greatly involved in the negotiations with Citigroup is Timothy Geithner, who is president of Citi's primary regulator - the New York Fed. The Washington Post reports that Geithner is scheduled to be named President-elect Barack Obama's Treasury secretary later Monday.

The agreement would mark a new phase in government efforts to stabilize U. S. banks and securities firms. The New York Times said that if approved, "the plan could serve as a model for other banks, heralding another shift in the government's morphing financial rescue."

The troubled bank - which got a 25 billion dollar injection last month - was among the nine big US banks that agreed to give the US government equity stakes in exchange for a combined 125 billion dollars under a 700 billion dollar financial sector rescue plan.