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 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. Since the United States has a 17 per cent vote at the fund, Congress could effectively vetothe plan.

The republican bill would force the US representative at the IMF to vote down the gold sales plan unless ``they are in the form of restitution to the member countries,'' Saxton said.

``If this proposed gold sales plan goes forward, it will be only a short time until the IMF proposes additional sales,'' Saxton said. ``My bill would put the hidden reserve of gold profits out of the reach of IMF functionaries and encourage their eventual return for the benefit of taxpayers.''

Saxton's bill looks set to be the first salvo in what could become a months-long battle in congress over the gold sales issue. The gold sales proposal is viewed by many republicans as ``dead in the water,'' but democrats have said it is too soon for many lawmakers to have come to a decision on the issue.

The exchange in congress could revive memories of a heated debate which lasted more than a year and resulting in an $18 billion funding package for the IMF last October.

One opponent of gold sales said many in Washingtonfeel that despite the IMF's new push for transparency, the fund continues to treat congress like mushrooms by, ``Keeping them in the dark and pouring manure on them.''

DeLay, a republican from Texas, vocal in his opposition to the IMF funding last year, is expected to be among those leading the efforts to quash the gold sales plan.

DeLay, in a letter to Rules Committee chairman David Dreier, voiced his ``strong opposition'' to the proposed gold sales. Among DeLay's concerns are that the sales, ``would significantly harm the US gold mining industry by leading to the further decline of the price of gold.''

US gold producers in the western states, and their representatives such as Nevada Sen Richard Bryan, are also against the proposal.

DeLay said the debt relief initiative could also hurt many of the nations it is aimed at helping since 36 of the 41 highly-indebted countries are also gold producers.

Last week chairman of the Senate Foreign Relations, Jesse Helms Committee, and Sen Chuck Hagel, aNebraska republican, came out in opposition to the gold sales, warning it could unnerve financial markets and hurt US gold producers.