WASHINGTON - US PRESIDENT-ELECT Barack Obama has chosen former White House chief of staff Leon Panetta to head the Central Intelligence Agency, a Democratic Party official said on Monday.

'Here is a guy who will be very credible with the Democrats in Congress and here's someone who brings not only an outsider's perspective but knows how the White House works,' said Mr James Lewis, an intelligence expert at the Center for Strategic and International Studies.

'He knows what presidents want and need. That's a plus,' he said.

Another ringing endorsement came from Mr Lee Hamilton, a former Indiana Democratic congressman and onetime co-chair of the 9/11 Commission into the 2001 Al-Qaeda terror attacks on the United States.

'He will be an outsider and I think the president wants an outsider's perspective on the CIA,' said Mr Hamilton, who now heads the Woodrow Wilson Center in Washington.

'I think Leon is a superb appointment,' he said. 'I've worked with him for decades. He's exceedingly bright, he's always well-informed.'

Mr Panetta was former president Bill Clinton's chief of staff from 1994 to 1997, following a 16-year career as a lawmaker from California.

He takes over from Mr Michael Hayden, a retired Air Force general whose ouster had been sought by lawmakers unhappy with his defense of the George W. Bush administration's controversial interrogation policies. Mr Hayden has led the CIA since 2006.

Although his expertise in the House of Representatives and in the Clinton administration was in budgets and finance, observers say Mr Panetta's political savvy and connections should make him a powerful CIA director.

His appointment will also help Mr Obama reassure critics who worry that the leadership of the US intelligence community has been dominated in recent years by the US military.

However Senator Dianne Feinstein, who will chair the Senate Select Committee on Intelligence, said she had not been informed about the appointment and was ambivalent about Mr Panetta's qualifications.

'I know nothing about this, other than what I've read,' the California Democrat said in a statement.

'My position has consistently been that I believe the (CIA) is best-served by having an intelligence professional in charge at this time,' she added.

Mr Panetta will work under retired admiral Dennis Blair, Mr Obama's choice to oversee the sprawling intelligence system as director of national intelligence.

Mr Obama has yet to announced either appointment, but Democratic officials and transition aides speaking on condition of anonymity have confirmed the picks.

A former commander of US forces in the Pacific from 1999 to 2002, Mr Blair will be only the third director of national intelligence (DNI).

The position was created by Congress in 2004 after investigations revealed that turf-sensitive intelligence agencies failed to share information that might have averted the September 11 attacks. That failure was followed by US intelligence's fateful error on Iraq's weapons of mass destruction.

'It'll be interesting to see how that relationship between Mr Blair and Mr Panetta develops,' said Mr Lewis, noting that Mr Panetta's political clout as a former White House chief of staff outweighs that of his nominal boss.

'Mr Panetta is a heavyweight, and he will be reporting to Mr Blair,' he said.

'What does it say about the DNI position? In some ways Mr Panetta would have been good for that job as well.'

The current top officials in the US intelligence community are retired or active military officers who have worked together for years and come from similar backgrounds, he said.

'Picking someone who is a civilian works against that fear of militarisation. It helps to have somebody who is politically astute, and one thing you can say about Leon Panetta is that he is as astute politically as you can get.' -- AFP