UPDATE 3-Auto bailout prospects fade; last ditch effort made

(Recasts, adds Democratic bill blocked by Republicans)

By John Crawley and Kevin Drawbaugh

WASHINGTON, Nov 19 (Reuters) - Prospects for a Congressional bailout of the U.S. auto industry faded further on Wednesday with little expectation that Democratic leaders would support a compromise in the works, with little time left for action.

The last ditch effort to extend $25 billion in aid to General Motors Corp (GM.N), Ford Motor Co (F.N) and Chrysler LLC hinged on negotiations that are supported by Republicans and the "lame-duck" White House.

"I won't say it's completely over. I'm still having conversations with people. But it doesn't look good," Sen. Robert Bennett, a Utah Republican, said of chances lawmakers would strike a deal that could pass.

Senate Banking Committee Chairman Christopher Dodd, a Democrat, said chances of a compromise bill emerging were "remote."

Congress has at most two days remaining in its post-election session. Without a deal in that time, automakers will likely have to wait until the new Congress and the Obama administration are in place in January.

Automakers facing a rapidly worsening liquidity crunch are urgently seeking help now to avert what industry executives this week said at congressional hearings soon could be the failure of one or more of the Big Three U.S. automakers.

"We don't like being here asking for this," GM Chief Executive Rick Wagoner told the House of Representatives Financial Services Committee on Wednesday.

"So at this point, without injections of liquidity ..., probably some portion of the domestic industry will not survive," Wagoner said.

With a Democratic-sponsored $25 billion bailout proposal off table in the Senate, the emphasis shifted to a compromise package based on a strategy Democratic leaders have already dismissed as unacceptable.

But Minority Leader Mitch McConnell said in remarks on the Senate floor that the compromise "is the only proposal being considered" that has any chance of becoming law now.

The approach spearheaded by Republicans Christopher Bond of Missouri and George Voinovich of Ohio would, according to McConnell and other lawmakers, amend extend $25 billion in loans approved in September for helping Detroit retool factories and make more fuel-efficient cars.

A number of strings attached to the retooling money would have to be cut or reworked to make it available immediately for operational and other pressing needs.

"We've made great progress. We're down to wording challenges," Bond said in remarks on the Senate floor Wednesday night.

Bond proposed the Senate consider the measure on Thursday, but Majority Leader Harry Reid objected on grounds no one had yet seen the bill.