Treasury Secretary Henry Paulson said Friday that the administration will seek access to the second half of the funds in the $700 billion rescue package to continue stabilizing financial markets.

With the $17.4 billion package to prop up General Motors Corp. and Chrysler LLC announced on Friday, the government has allocated the first $350 billion of the Troubled Asset Relief Program (TARP).

The White House used the TARP funds for the automakers after a legislative proposal crafted by the administration and Democrats was blocked by Senate Republicans last week.

“Absent congressional action, no other authorities existed to stave off a disorderly bankruptcy of one or more auto companies. As a result of this decision, Treasury effectively has allocated the first $350 billion from the TARP,” Paulson said.

Paulson on Friday did not formally request the  second half of the funds, but said it should be released so that the administration will have the flexility to help institutions in need.

The Treasury secretary said he will work with Congress and President-elect Obama's transition team on the request for the remaining $350 billion. Paulson had intended to leave the money for the Obama administration.

The Federal Reserve and Federal Deposit Insurance Corporation have resources to stave off an immediate financial crisis in the coming weeks, while the Treasury’s funds are effectively tapped out, Paulson said. The first $350 billion has already been allocated, but Treasury is still working to finalize several plans to disburse the funds to banks.

“It is clear, however, that Congress will need to release the remainder of the TARP to support financial market stability. I will discuss that process with the congressional leadership and the president-elect's transition team in the near future,” Paulson said.