So Hillary, how do you fancy being the next Secretary of State?

When President Barack Obama gets his first 3am call at the White House, it may well be Hillary Clinton briefing him on his first foreign crisis.

The former first lady has emerged as a favourite to become the Secretary of State after the President-elect sounded her out in Chicago on Thursday. "There was a serious discussion to determine whether, if offered secretary of state, she would accept it," a source described as "close to the Obama transition team" said yesterday.

Appointing Mrs Clinton the position "has been of great interest to Obama for a while," the source said.

The rancour of the former rivals' duel for the Democratic nomination has receded and the widespread expectation that Mrs Clinton will be asked to handle foreign policy reflects the sheer scale of the problems facing the new administration. From her years as first lady, when she visited 83 countries, Mrs Clinton became an expert in foreign policy. She is on first-name terms with many world leaders and is respected by America's allies.

One potential problem could be that her friend from the Senate, Vice President-elect Joe Biden was preparing himself to play an overarching role in foreign policy in the next administration.

Mrs Clinton is said to have eased her public position of being uninterested in a cabinet position but was keeping her cards close to her chest. "I'm not going to speculate or address anything about the President-elect's incoming administration," she said.

One of Mrs Clinton's most effective attacks during the primary season was the "3am phone call" that drew attention to Mr Obama's lack of foreign policy experience. "Something is happening in the world," the gravelly voice of the narrator said. "It's 3am, your children are safe and asleep. Who do you want answering the phone?"

Mr Obama has said that climate change, terrorism and pandemic disease cannot be addressed through traditional methods and has called for a redefinition of America's foreign policy priorities. He appears to be turning to stalwarts of the Clinton administration as he picks his team.

One of Mrs Clinton's closest allies is Madeleine Albright, the woman who served as Secretary of State to President Bill Clinton and who has already been appointed by Mr Obama to be his point-person at this weekend's G20 meeting on the global financial crisis.

During the election campaign Mr Obama was asked what books besides the Bible he would consider essential reading as president. He named a biography of Abraham Lincoln, called Team of Rivals. "[It] talks about Lincoln's capacity to bring opponents of his and people who have run against him in his cabinet. And he was confident enough to be willing to have these dissenting voices ... It's a remarkable study in leadership," said Mr Obama.

Some of the President-elect's transition advisers pushed hard for Mrs Clinton to be Secretary of State, saying it, "would create the ultimate 'Team of Rivals' cabinet."

As Mr Obama assembles a new cabinet at record speed, it is clear that his top priority will be dealing with the economy, rather than foreign entanglements. It is feared that one more shock to the US financial system – the bankruptcy of the car giant General Motors, for example – could flip a recession into a full blown depression.

Dealing with peace talks in the Middle East, war in Iraq and Afghanistan and nuclear weapons crises with Iran and North Korea could easily distract from domestic priorities.

After his overwhelming electoral triumph, Mr Obama does not need to repay any favours to the Clintons. He has always been wary of having to deal with Mr Clinton in the background and the Clintons' extensive foreign business dealings could run foul of the new administration's high standards of transparency for appointees.

Other names being floated for the Secretary of State position – expected to be announced next week – include the former presidential candidate Senator John Kerry, who ran against George Bush in 2004, and the Democratic governor of New Mexico Bill Richardson, as well as the Republican senator Chuck Hagel.

Will Hillary Clinton be Secretary of State?