Washington  - US financial officials are drawing up plans to remove troubled mortgage assets from struggling banks and place them in a new government-backed firm that has been dubbed a "bad bank."

Outgoing Treasury Secretary Henry Paulson said his department was considering the idea, which would mark one of the most dramatic moves by the US government since the financial crisis exploded in September.

A lot of work has been done on an aggregator bank," Paulson said in Washington, according to Bloomberg News. Federal Reserve Chairman Ben Bernanke also floated the idea in a speech in London on Tuesday.

Paulson's comments came days before president-elect Barack Obama takes office. The Wall Street Journal reported that Bush administration officials have been in close consultations on the plans with Obama's incoming team.

The move would be part of the 700-billion-dollar financial rescue package first passed in October. Congress is currently mulling whether to release the second half of the funds. The Senate approved their release on Thursday. The House of Representatives will vote next week.

President George W Bush and Paulson have come under criticism for their handling of the initial 350 billion dollars of the funds. The money was used primarily to inject capital into struggling banks, rather than to buy up the troubled mortgage assets at the heart of the financial crisis. (dpa)