Gregg’s withdrawal on Thursday, over "irresolvable conflicts", complicated Obama’s attempt to win Republican support for his 789-billion-dollar (612-billion-euro) economic stimulus package and other key agenda items.

The New Hampshire senator made his decision public just as the president began a speech in Peoria appealing to Republicans to drop objections to the plan, expected to finally clear Congress on Friday.

Gregg said he was quitting because of differences on the massive package and the reorganisation of the Census Bureau, part of the Commerce Department.

Obama later told reporters aboard Air Force One that he knew Gregg had been having second thoughts and insisted that his crusade for bipartisanship would continue.

"I am going to keep on working at this," he said, adding that Americans were "desperate" for their leaders to find common ground. "I am an eternal optimist."

White House spokesman Robert Gibbs betrayed frustration over Gregg’s move, while Obama said in a newspaper interview that the withdrawal was a "surprise".

"It comes as something of a surprise, because the truth, you know, Mr Gregg approached us with interest and seemed enthusiastic," Obama told the Springfield State Journal-Register newspaper.

"But ultimately, I think, we’re going to just keep on making efforts to build the kind of bipartisan consensus around important issues that I think the American people are looking for."

Gibbs pointed out that the Republican had "reached out to the president and offered his name for secretary of commerce."

Gregg’s move dealt a fresh blow to Obama’s attempts to govern in a bipartisan manner and ease the bitter partisanship that has engulfed US politics over the last two decades.

It was also another complication as he attempts to fill out his cabinet.

Gregg was the second nominee for commerce secretary to withdraw: New Mexico governor and former presidential candidate Bill Richardson stepped down over an inquiry into contracting orders in his home state.

Obama also lost another high-profile nominee, former senator Tom Daschle, whom he picked to serve as secretary of health and human services but was felled by a storm over unpaid taxes.

Gregg’s shock move overshadowed Obama’s latest pitch for Republican support for his stimulus plan, delivered at a manufacturing plant run by Caterpillar Inc, a construction machine giant.

In an earlier repudiation of Obama’s political olive branch, no Republican voted for an initial version of the bill in the House of Representatives and only three backed it in the Senate.

"It is time for Congress to act, and I hope they act in a bipartisan fashion," Obama said during his visit to Caterpillar, which recently laid off more than 20,000 people.

"But no matter how they act, when they do, when they finally pass our plan, I believe it will be a major step forward on our path to economic recovery."

The president argued that the massive bill would unleash economic growth and recreate the jobs of millions of Americans who have fallen victim to the worst economic slump since the 1930s.

Obama’s visit to his home state of Illinois was the latest of a string of campaign-style appearances that has taken him to Indiana and Florida this week.

On Tuesday, Obama will continue his whirlwind tour with a trip to Denver, Colorado and he will go to Arizona the next day, a White House aide said.

His decision to visit Peoria was a clear symbol: the midwestern city is regarded as the heart of "Middle America".

[AFP / Expatica]