The 44-year-old former Harvard professor has developed a reputation for brilliance and brashness - and he does not suffer fools gladly.

He does not have the rapport with the financial markets that came naturally to Robert Rubin, the former head of one of Wall Street's most respected firms, Goldman Sachs.

Nor does he have the accommodating style that smoothed Mr Rubin's relationship with a hostile, Republican Congress.

But in the six years since he joined the US Treasury, he has become Washington's leading firefighter during the world financial crisis.

Long and winding road

He has journeyed from Tokyo to Brazil, urging reforms and laying down the terms of international rescue packages.

When the US intervened to stop the fall of the Japanese yen, it was Mr Summers who told the Japanese government they must accelerate reform of their troubled banking sector.

He also played a central role in the Russian crisis and negotiations over China's entry into the World Trade Organisation.

He has been in charge of coordinating US economic policy with other major industrial countries, chairing the private deliberations of key officials of the G7 and the OECD (Organisation for Economic Cooperation and Development).

In these forums he resisted proposals to manage the world's currencies, sticking to the policy of a strong dollar.

And Mr Summers has tried hard to improve his 'people skills' which once led the Wall Street Journal newspaper to write that "Larry Summers is to humility what Madonna is to chastity".

Controversy at World Bank

Before joining the US government, Mr Summers was chief economist at the World Bank, the organisation charged with eliminating world poverty.

His judgement was questioned when he signed a memo advocating the dumping of toxic waste in developing countries on the grounds that less economic harm would be done there.

He was also involved in the early efforts to aid Russia after the collapse of Communism.

Long active in Democratic Party circles, Mr Summers was an advisor to Michael Dukakis, the Massachusetts governor, during his Presidential bid in 1988.

Brilliant academic career

Professor Summers was the youngest-ever tenured professor at Harvard at age 28.

He received the US economics profession's highest prize, the John Bates Clark medal.

His wide-ranging academic interests include the causes of unemployment, the nature of reform in Eastern Europe, and the reasons for the decline in US competitiveness.

A reformed Keynesian, he sought to explain how the lack of flexible labour markets kept unemployment high in Europe.

Reassuring the markets

Larry Summers' nomination has garnered widespread praise among policy-makers and bankers alike.

The head of the US central bank, Alan Greenspan, said he was "a person of extraordinary talent and judgment, who will continue the important work Bob Rubin initiated".

Donald Ogilve of the American Bankers Association said he was "an excellent choice".

His nomination is expected to face little opposition in Congress, where Republican Senators rushed to praise him.

He could face more difficulty on Wall Street, where markets plunged initially on the news of his appointment.

"Summers is not as sensitive to markets as Rubin," said Larry Wachtel of Prudential Securities.

Mr Rubin, who calmed the financial markets from the steps of the Treasury during the turbulent days of crisis this autumn, believes his deputy is ready.

"In the last year or so .. Larry has developed a great deal of credibility," he said. The markets "are now comfortable with him".

That credibility could prove very necessary, with many observers expecting the US economy - and the booming stock market - to cool in the next few years.

With the US enjoying its longest peace-time boom in recent history, managing a gradual slowdown without disrupting the markets could be Mr Summers' most enduring legacy.