11/20/2008 1:18:12 PM

General Motors Corp.'s world headquarters is seen along the Detroit River in Detroit, Michigan November, 18, 2008. REUTERS/Rebecca Cook

DETROIT (Reuters) - Shares of General Motors Corp (GM) and Ford Motor Co (F) tumbled on Wednesday as mounting political opposition cast doubt over a proposed $25 billion government bailout for the U.S. automakers.

Shares of GM dropped more than 15 percent to a 66-year low, while Ford shares tumbled 23 percent to their lowest level in 26 years.

The stocks extended declines after the chairman of the U.S. Senate Banking Committee said it looks unlikely Congress will come to agreement this week on an assistance package for the struggling U.S. auto industry.

"I'm anxious to see something happen," Connecticut Democrat Christopher Dodd told reporters. "But frankly, the idea that there's going to be a bill, I think, is remote."

U.S. auto executives headed to Capitol Hill for a second day to argue their case for the aid package which they say is imperative for the industry to survive.

Barclays Capital analyst Brian Johnson said the prospect of a compromise between lawmakers remains "elusive" before a potential Senate vote this week.

"Assuming defeat, GM would have to 'run on fumes' until the next Congress and administration, unless Congress were to reconvene in December to address emergency compromise legislation," Johnson said in a research note.

Democrats have proposed a $25 billion bailout for the ailing automakers, on top of the $25 billion in federal loans already approved by Congress to help the industry retool plants and meet new fuel economy mandates.

The proposal has faced stiff opposition from critics including Republicans and government officials, who have questioned whether Detroit automakers would be healthy enough to repay any loans and have remained resistant to spending yet more taxpayer money on corporate rescues.

Republicans and the White House favor a plan to tap the already approved $25 billion in auto retooling loans.

JPMorgan analyst Himanshu Patel said that federal aid is more likely than not, but added it is "clearer now" that the timing of any such aid is not imminent.

GM shares were down 48 cents, to $2.61, the lowest since 1942. Ford shares were down 39 cents to $1.29, hitting a 26-year low.

(Reporting by Soyoung Kim)