He also has excellent contacts in Congress, where he worked for 20 years and became known as the "101st senator" for his intimate knowledge of the institution's workings.

The decision not to replace Mr Emanuel, 50, with an outsider will, however, attract criticism that the president is not facing up to the mistakes made in the first half of his four-year term.

Analysts have said choosing another Washington insider would show a lack of imagination and of recognition that a change of direction was needed after the White House appeared to lose touch with popular anger about the struggling economy and rising government spending.

Mr Emanuel's departure, which was first reported by The Daily Telegraph in June, follows repeated clashes with other senior members of the president's team and ideological clashes over policy. He also became the focal point of Left-wing Democrats' anger at the administration's perceived move to the centre.

Even though other chiefs of staff have left the notoriously demanding job before four years, friends have said that even without the opportunity of running in Chicago, Mr Emanuel would have gone after next month's midterm elections, when the Democrats are expected to suffer heavy losses. The need to build a campaign for the February mayoral contest in Chicago brought his decision forward.

He, however, leaves on good terms with the president, who valued his loyalty, tenacity and sense of humour. He will be given a send-off in the Rose Garden of the White House.

His exit is likely to be followed by a major reshuffle later in the year, with Gen James Jones, the national security adviser, expected to be among the first to leave after the Nov 2 polls.

Although he did not officially confirm the timing of Mr Emanuel’s departure, White House spokesman Robert Gibbs heaped praise on the chief of staff.

“There is not an important thing that has happened in this administration that we’ve been able to accomplish for the American people that has not involved heavily his signature,” he said.

“The title 'chief of staff’ in many ways, says it all. He has been the energetic, inspirational leader of us, taking the president’s promises and agenda and enacting them into law.”

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