The US Senate on Friday approved legislation to restrict the hiring of foreign workers by banks that are receiving government bailout funds.

The Senate added the restriction as part of the economic stimulus plan being debated by senators.

Under the legislation, which has a two-year lifespan, more than 300 banks receiving bailout funds, will be required to employ American workers ahead of foreign nationals.

If signed into law, banks seeking visas for foreign workers will be barred from displacing or replacing American employees for three months before and three months after applying for the visas, the Associated Press said.

Stuart Anderson, director of the National Foundation for American Policy, an Arlington, Va.-based think tank, criticized the Senate action.

"It seems to be an unwise policy to deny companies access to talented people simply because those individuals were not born in the United States,"Anderson was quoted as saying.

The action is a reminder of the "Buy American provisions" in the US$819 billion stimulus plan that the House passed on January 28.

The provisions, which generally prohibit the purchase of foreign iron and steel for any stimulus-funded infrastructure project, sparked protests about protectionism from US businesses and trading partners.

In the face of warnings by US President Barack Obama that such rules could cause trade wars, the Senate agreed to specify in the bill that US international trade agreements should not be violated.

However, it rejected an effort by Republican Senator John McCain to remove the provision from the plan.