U.S. banks that have received government aid, including Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., are considering buying toxic assets to be sold by rivals under the U.S. Treasury Department’s plan to revive the financial system, according to a story on FT.com, the Web site of the Financial Times.

Spencer Bachus, the ranking Republican on the U.S. House of Representatives Financial Services Committee, vowed after being told of the plans to introduce legislation to stop financial institutions from “gaming the system to reap taxpayer-subsidized windfalls.”

Bachus said it would mark “a new level of absurdity” if financial institutions were “colluding to swap assets at inflated prices using taxpayers’ dollars.”

Participating in the plan as a buyer could be complicated for Citigroup, which has suffered billions of dollars in write-downs on mortgage-backed assets and is about to cede a 36 percent stake to the government.

Citigroup declined to comment. People close to the company said it was considering whether to take part in the plan as a seller, buyer or manager of the assets, but no decision had yet been taken.

Officials want banks to sell risky assets in order to cleanse their balance sheets and attract new investments from private investors, limiting the need for the further government funds.

Banks have three options if they want to buy toxic assets: apply to become one of four or five fund managers that will purchase troubled securities; bid for packages of bad loans; or buy into funds set up by others. The government plan does not allow banks to buy their own assets.

“It’s an open program designed to get markets going,” a Treasury Department official said. “It is between a bank and their supervisor whether they are healthy enough to acquire assets.”