Democrats on Tuesday stripped out a controversial tax from their landmark financial reform bill as they scrambled to win the votes needed to pass it through Congress.

Democrats hoped the change would win back moderate Republicans who had threatened to withdraw their support due to a $17.9 billion tax on large financial institutions that was added last week.

The new plan approved by negotiators on Tuesday removes that tax. Instead, it covers the bill's costs by shutting down the $700 billion Troubled Asset Relief Fund and raising the amount that banks must pay to insure their deposits.

(Reporting by Andy Sullivan; Editing by Will Dunham)