Lt Col Rupert Thorneloe, 40, the commanding officer of the Welsh Guards, died after his Viking armoured vehicle was blown up by a substantial roadside bomb that killed another British soldier and wounded six others.
A high-level inquiry is now underway as to why the officer was travelling in a Viking, which were supposed to be restricted to low risk areas pending its replacement by the more heavily armoured Warthog vehicle next year.
Lt Col Thorneloe is the first commanding officer to be killed during a military operation since Col "H" Jones, VC, died leading 2nd Bn The Parachute Regiment in its attack on Goose Green during the Falklands War in 1982. The legendary paratrooper was awarded the Victoria Cross for the "utmost gallantry" he showed in leading the assault.
Lt Col Thorneloe was also a highly regarded officer and seen as a "high flier" within the Army. His previous job was military assistant to Des Browne, the former defence secretary.
The Prince of Wales, who, as Colonel in Chief of the Welsh Guards, knew the officer well, sent a private message of condolence to the regiment. A spokesman for Clarence House said the Prince said he was "deeply saddened" by Lt Col Thorneloe's death and would be writing to his family.
In a statement released last night, the officer's wife, Sally, said of her husband: "Rupert was my very best friend and his death is a devastating blow.
"Our daughters Hannah and Sophie will have to grow up without their beloved Daddy, although I will see a part of him in them every day.
"I could not have asked for a more caring, adoring and loving husband and father."
The second soldier to die was named as Tpr Joshua Hammond, 18, of the 2nd Royal Tank Regiment.
General Sir Richard Dannatt, Chief of the General Staff, described the deaths as a “devastating and bitter blow”.
“Lt Col Thorneloe was an outstanding Commanding Officer and a born leader, who I knew well. At the leading edge of his generation, his loss will be felt deeply.
“This tragic incident has only served to strengthen our resolve and commitment to succeed in bringing stability and prosperity to Helmand Province.”
Brig Tim Radford, Commander Task Force Helmand, said: "Rupert Thorneloe was, quite simply, a superb commanding officer. He was an inspiration to his men, and they loved him for it. He died as he lived his life, leading from the front."
News of the deaths came as the Americans announced a major troop surge into Afghanistan's Helmand province, with 4,000 US Marines, backed by helicopter gunships, beginning an operation to push the Taliban out of strongholds around the provincial capital Lashkar Gah.
Lt Col Thorneloe is the third officer that the Guards regiment has lost in the last seven weeks following the death of company commander Major Sean Birchall, 33, last month and Lt Mark Evison, 26, in May. The battalion also lost Lance Sgt Tobie Fasous, 29, in April.
The news will come as a blow to the battalion as it continues on Operation Panthers Claw - its mission to drive the Taliban out of the area surrounding Lashkar Gah and bring it under government control before the presidential elections next month.
Lt Col Thorneloe, who commanded more than 1,000 troops in his battle group, left base on a resupply convoy on Wednesday to visit his men, who were conducting a major operation in hostile territory.
His Viking vehicle was at the approach to a canal crossing when it was hit. It was not known whether the Taliban deliberately targeted his vehicle, which is likely to have been carrying other officers and senior non-commissioned officers (NCOs) from his battalion.
Two of the six soldiers injured in the attack were classified as having the most serious category of life-threatening injuries, two had lesser injuries and two escaped with only minor injuries.
In recent months, the Taliban have been building increasingly bigger roadside bombs adapting technology once used by the IRA.
The devices have been packed with up to 350kg of homemade fertiliser, triggered by mines or shells salvaged from old arms dumps.
They have become so large that on one occasion a 65 tonne Leopard 2 tank was blown onto its turret by one of the bombs.
Eight British servicemen are known to have been killed as a result of bomb attacks on Viking vehicles.
There is speculation that the death of such a high profile officer will have political implications on the direction of the Afghanistan campaign.
Downing Street might agree to overturn its rejection of a Ministry of Defence proposal for 2,000 extra troops that would include an extra battlegroup and a permanent force of explosive experts.
Gordon Brown has allowed 700 extra troops only on a temporary basis over the summer elections bringing the current total to 9,000.
The latest deaths bring the told number of British troops killed in Afghanistan to 171 and the total for both Iraq and Afghanistan to 350.
Before departing for the tour the battalion was inspected by the Prince of Wales at its barracks in Aldershot, Hants. Speaking at the inspection Lt Col Thornloe had said: "Our and the biggest challenge will be to win the hearts and minds of the Afghan people."
In his eulogy for Major Birchall, whose funeral is next Wednesday in the Guards Chapel, Wellington Barracks, Lt Col Thorneloe had said: "Our loss, as a regiment, is enormous. But it is as nothing compared to that suffered by Sean's family."
He also wrote a moving handwritten letter to the mother of Lt Evison in which he said the junior officer's action had "no doubt that day saved lives".
The MoD also announced that two RAF officers were killed when their Tornado G3 fighter crashed in Argyll, Scotland, yesterday.