US congressional leaders said they were closer to a compromise on economic relief legislation on Tuesday after several hours of intense negotiations as both parties faced pressure to prop up the country’s recovery.

The talks that began in the late afternoon could prove pivotal for the fate of more fiscal stimulus for the world’s largest economy as coronavirus cases continue to spread, potentially ending a political impasse that has lasted months.

If US political leaders give the green light to an agreement, it could pave the way for the passage of a package worth $748bn including help for small business and the unemployed, which was presented by a bipartisan group of senators earlier this week.

The negotiations on Tuesday included Nancy Pelosi, the Democratic Speaker of the House of Representatives, and Mitch McConnell, the Republican Senate majority leader, as well as Chuck Schumer and Kevin McCarthy, the minority leaders in each chamber.

After the latest session on Tuesday night, Mr McConnell was upbeat. “Everybody wants to finish. Everybody wants to get a final agreement as soon as possible. We all believe the country needs it. And I think we’re getting closer and closer,” he said.

Mr Schumer added: “We’re talking. We’re exchanging paper and ideas back and forth, making progress and hopefully we can come to an agreement soon.”

The four highest-ranking lawmakers have spoken infrequently over the past few years as bitter partisan divisions over policy and politics deepened during the Trump administration.

Throughout the year, senior Federal Reserve officials have called in vain for lawmakers to provide more fiscal support to the pandemic-ravaged economy to prevent a sharp slowdown in the near term, as well as long-term damage to businesses and the labour force.

The end of the election campaign has raised a new chance for a deal, with Joe Biden, the president-elect, calling on Congress for action even before he takes office in January.

On Tuesday, six weeks after the November 3 poll, Mr McConnell recognised Mr Biden’s victory over President Donald Trump, which could improve the atmosphere for co-operation on Capitol Hill.

Earlier in the day, Mr McConnell said that he was determined to deliver a deal before members of Congress leave Washington for the holidays. “We’re not leaving here without a Covid package,” he said at a press conference. “It’s not going to happen.”

Meanwhile, rank-and-file US lawmakers from both parties have been under mounting pressure from constituents and business groups to find a compromise and deliver support in light of surging coronavirus cases and evidence that the labour market rebound has slowed.

The bipartisan package under consideration would offer $300bn in aid to small business and $180bn for unemployment benefits, as well as help for other struggling sectors such as airlines and government funding for education and healthcare programmes.

The two most contentious provisions throughout the talks — liability protection for companies and aid to state and local governments — were stripped out of the latest legislation to facilitate a solution.

If a stimulus deal advances after Tuesday’s call, it could be paired with a deal to fund the government and prevent a shutdown of federal operations at the end of this week. On Tuesday Ms Pelosi also spoke for more than an hour with Steven Mnuchin, the US Treasury secretary, about the potential for compromise on both matters.

Some lawmakers, particularly but not only on the Democratic side, are deeply dissatisfied that the emerging deal does not contain direct payments to individuals, which could prove an obstacle to approving the agreement.

“We are fighting for direct cash relief because it helps people cover basic expenses like groceries and rent, in tandem with unemployment benefits. We can’t go adjourn without it,” Ilhan Omar, the Democratic Congresswoman from Minnesota, wrote on Twitter.