Dance's hottest >property

At the Royal Ballet, the future's Scarlett. The choreographic whizz kid Liam Scarlett, 26, has just landed the newest job in the company: artist-in-residence, a post created especially for him. He may be young, but it's possible this step comes not a moment too soon.

For several years, the wide-eyed, tousle-haired dancer – he looks a little like Elijah Wood as Frodo Baggins – has been increasingly recognised as the "great white hope" of British choreography.

He was nominated for an Olivier Award for Asphodel Meadows (2010), his initial work for Covent Garden's main stage, but the buzz around him is due not least to his bent for narrative dance. Having made a powerful statement of intent this spring with his first one-act story ballet, Sweet Violets, he is planning more. "I've got three – no, five! – on the go," he declares, apparently astonished.

With his new appointment he has decided to give up his performing career as a First Artist of the Royal Ballet to concentrate on choreography: "I was starting to feel that I needed 25 hours in a day." It's a big decision, and has come earlier than many might have expected, but Scarlett remarks with characteristic quiet confidence that for him it is a good moment – and he knew it would happen eventually. "I was happy with the repertoire I was dancing and I knew that if I gave it up I'd miss it," he says. "But it's better to stop while I'm slightly sad to do so, rather than giving a sigh of relief."

The post represents a major vote of confidence from the Royal Ballet's new artistic director, Kevin O'Hare, and it is a secure base from which Scarlett can launch himself in earnest. His inventive strengths leap off the stage: a firm rooting in classical technique meets a fine feeling for encompassing space, the flow and accenting of phrases, the assurance to venture into distinctive territory mingled with the self-confidence not to resort to shock tactics.

It's the balance of geometry, musical response, physicality and an extraordinarily sensitive rendering of emotional states that secured Scarlett his Olivier nomination. Unlike certain other celebrated choreographers, he knows the value of stillness as well as that of motion. Asphodel Meadows was supposedly abstract, but shot through with hints of the Hades of Greek mythology and the fear of loss. Its three pas de deux explore relationships at perhaps a deeper level than words can reach. A sensuous, arching lift can hint at a world of vanishing memories; a simple, motionless gaze between two performers can become as much a part of dance as the finest footwork. It would be sophisticated work for an artist twice Scarlett's age. Music is paramount, even if it isn't always the starting point for his concepts.

"There should always be a connection with the music," he declares. "Even if it's something minimal, there has to be a relationship between what's happening in the pit and what's happening on stage – and it has to be visually acknowledged. That's my stamp that I like to put on a piece: that it somehow translates the music into real life."

For Asphodel Meadows he chose the bittersweet and multifaceted Concerto for Two Pianos by Poulenc, while Viscera – created for Miami City Ballet and staged this autumn by the Royal Ballet – interpreted the Piano Concerto No 1 by the American composer Lowell Liebermann. "It's wonderful to find a composer whose works I like and who is alive, kicking and commissionable," Scarlett enthuses. "I hope we'll work together collaboratively in the future."

Scarlett, born in Ipswich, started dancing at the age of four and showed an early inclination towards stagecraft by "arranging people on stage nicely" for the class nativity play. Joining the Royal Ballet's junior school, White Lodge, he met with much encouragement for his creative streak, including from the former Royal Ballet and Ballet Rambert director Norman Morrice at the annual choreographic competition. "I was 11 and didn't know who he was," says Scarlett. "Then I found out. And I thought, 'Well, if he says I should do more...'"

His eyes glaze over, though, at the words Billy Elliot. "When the film came out, I was right at the age Billy was," he remembers. "There were 16 of us in our year and the number of press interviews we had to do I think has made us resent that film! It had a great impact on the world of ballet, especially in terms of male dancing. But it was hammered in our face a bit." Unlike the movie's youthful hero, he never experienced any problems with being a boy interested in ballet: "Most people didn't even question it."

Influences on his work have been many and varied. He loves Kenneth MacMillan's pas de deux ("just breathtaking"), admires Jiri Kylian and Frederick Ashton for their different yet equally profound musicality, and Jerome Robbins for Afternoon of a Faun, "a brilliant piece that I go back to whenever I'm stuck and look at the simplicity and the humanity of it."

The runaway success of Asphodel Meadows took him by surprise. "It was overwhelming and very humbling," he recalls. "The first night will really stay with me, the response and then the reviews – but most importantly, what the dancers said to me afterwards. It certainly gave me a lot of confidence to try something a little different, or more unsafe. And then Sweet Violets came along."

There was nothing remotely safe about that. Set to Rachmaninov's Trio Elégiaque, it concerns the artist Walter Sickert and his fascination with Jack the Ripper. Scarlett, though, remains proud of it and feels that it was misunderstood. "I wanted it to be episodic and muddled, in a way," he says. "I loved creating it. I loved getting into those characters and making steps that were meant to say something. It was like being a film director: you have to engage an audience, take them on a journey and make them feel as if they're in another world."

As if that's not enough, this young man designed the costumes himself for Viscera – rich purples, velvety textures, scooped-away backs for the women – and plans to repeat the process in future.