The United States Senate has voted overwhelmingly to amend a "Buy American" proposal in its economic stimulus package.

The bill that passed the House of Representatives last week would require the use of American-made iron and steel for public works projects paid for with US tax dollars.

It came after President Barack Obama expressed concern that the original language could provoke a trade war.

Senator John McCain, the former Republican presidential candidate, said the "Buy American" proposal would be a mistake.

"This 'Buy American provision' has echoes of the disastrous Smoot Hawley Tariff Act. It sends a message to the world that the United States is going back to protectionism."

The provision has strong support among congressional Democrats and labour unions, and clear popular appeal in the midst of economic distress.

But it is opposed by many Republicans, business groups and economists who warn it could provoke trade retaliation and thus further deepen the global downturn.

The "Buy American" clause, demanding that all projects financed by the 900 billion dollars being debated in the Senate plan use only US-made goods.