Top U.S. policy makers emerged from hours of tense negotiations with a clear message just after midnight Sunday morning: A deal to bailout U.S. financial markets has been agreed on and all that remains to be done is to commit the legislation to paper.

Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi (D., Calif.), and Senate Majority Leader Harry Reid (D.), were flanked by key negotiators in the Capitol as they announced that a $700 billion plan to have Treasury buy up toxic assets had been all but finalized after hours of exhausting negotiations.

“I think we’re there,” an exhausted Mr. Paulson said, a sentiment echoed in the statements of negotiators such as House Financial Services Chairman Barney Frank (D., Mass.) and Senate Banking Committee head Christopher Dodd (D., Conn.).

Those present said the bailout plan still needs to be drafted in its final form, a process staff members were expected to continue throughout the night in what one aide called a “marathon drafting session” in Ms. Pelosi’s office just off the rotunda in the Capitol building. A formal announcement is scheduled for some time Sunday, though an exact time and location were not immediately available.

A summary of the tentative agreement released by Ms. Pelosi’s office said the plan “gives taxpayers an ownership stake and profit-making opportunities with participating companies; puts taxpayers first in line to recover assets if a participating company fails; (and) guarantees taxpayers are repaid in full — if other protections have not actually produced a profit.” (See Ms. Pelosi’s summary.)

Additionally, the summary said the legislation will expand the range of firms that can sell troubled assets to the government to include pension plans, local governments and community banks serving “low- and middle-income families.”

A House Democratic aide said the government would be able to receive warrants it could hold until maturity from financial firms on assets received either through auctions or through direct purchases.

I’ll reserve comment until I see a markup of the final bill.

Update: Ed Morrissey has more at Hot Air… It looks like House Republicans were able to get most of the pork removed from the bill.

Update (1:50 p.m. eastern): House Republican Whip Roy Blunt’s office has released a side by side comparison of the new bill versus the Paulson Plan and the Frank-Dodd bill.

The new bill does look more palatable but the devil’s in the details… I what to see the final bill and the conference report before I say yea or nay.

Update (4:10 p.m. eastern): N.Z. Bear @ Porkbusters has the draft bill… (H/T: MM)

Update (6:40 p.m. eastern): Michelle Malkin has an updated draft and a quick and dirty analisys of the bill.

This thing stinks to high heaven… Unfortunately I think this bailout has become a necessary evil – the Bush Administration, Congress and the media have painted us into a corner and if this bill doesn’t pass Secretary Paulson’s dire warnings will ultimately become a self-fulfilling prophecy.