Mr Talbott, who shared a house with Mr Clinton when they were both Rhodes Scholars at Oxford in the 1960s, was already ambassador at large to Russia and the states of the former Soviet Union. In the last year he has advocated full political and financial support for President Boris Yeltsin.
He will continue to manage relations with Russia which Mr Clinton is to visit for three days from 12 January. Announcing Mr Talbott's appointment yesterday the Secretary of State, Warren Christopher, said: 'He knows more than simply the workings of American foreign policy: he knows how Washington works as well.'
The White House is alarmed by the electoral success of Russian ultra-nationalists and Communists but unclear how it can influence events in Russia.
Mr Talbott, 47, replaces Clifton Wharton, the former deputy to Mr Christopher, who was forced to resign in November. His departure was speeded by the crisis in Mr Clinton's foreign policy in October which followed the death of 17 US Rangers in Mogadishu and the failure to eject the Haitian military from power.
A Russian scholar at Yale, Mr Talbott became bureau chief for Time magazine in Moscow where he made his name by obtaining the taped memoirs of Nikita Khrushchev, the former Soviet leader. As a Time columnist, latterly as bureau chief in Washington, Mr Talbott wrote dense but well-informed books on arms control and relations between the US and the Soviet Union.
He was considered to have done well as co-ordinator of Russian policy this year and was chosen by Mr Christopher from a list of four senior officials approved by the White House. Good relations with the Secretary of State combined with his long personal friendship with Mr Clinton means that Mr Talbott will play a critical role in formulating and presenting American foreign policy.
Asked about the need for continued American support for Boris Yeltsin Mr Talbott said: 'Now more than ever.' Although he has spoken of trying to reduce the social misery which has followed the introduction of a market economy in Russia, the US gave only dollars 2bn ( pounds 1.34bn) in aid this year. Mr Talbott has also championed the creation of a strategic relationship with Russia involving military and scientific co-operation.
For Mr Clinton the new appointment has the further advantage that Mr Talbott is effective in dealing with the press and, unlike Mr Christopher, is good on television. This ability is a priority with the White House.
Mr Clinton's two other reshuffles - the appointment of David Gergen and Admiral Bobby Inman - since he took office have promoted men known for their ability to cultivate the media.