The legislation, sponsored by joint economic committee vice chairman Jim Saxton, would block the sale of IMF gold unless proceeds were returned to the United States and other IMF donor nations.

A spokesman for Saxton said yesterday the bill is expected to be co-sponsored by house republican leader Dick Armey and republican whip Tom Delay. Neither Armey or Delay could be immediately reached for comment.

The group of seven major industrial nations agreed this month to put money from the IMF selling its gold reserves into a trust fund, and use the interest income to fund debt relief and a lending programme for poor countries.

The gold sales plan needs the approval of 85 per cent of the IMF's board.