UPDATE 1-Canada's veteran tax-cutting finance minister resigns

OTTAWA, March 18 (Reuters) - Finance Minister Jim Flaherty, who helped Canada emerge from the recent recession in better shape than most rich countries, resigned from politics on Tuesday after recording the third longest stint in the portfolio in the country's history.

Flaherty, 64, has been suffering acutely from a rare skin disease but he denied his resignation had anything to do with health.

He has been at the side of Prime Minister Stephen Harper ever since the Conservatives took power in 2006, cutting business and sales taxes and then putting through a record deficit in nominal dollar terms to counter the recession.

"Yesterday, I informed the Prime Minister that I am resigning from Cabinet. This was a decision I made with my family earlier this year, as I will be returning to the private sector," he said in a statement accompanied by a picture of him standing at an office door waving goodbye.

Harper said he would announce Flaherty's replacement in coming days. Among leading contenders would be Treasury Board President Tony Clement and Foreign Minister John Baird, both from the province of Ontario, Employment Minister Jason Kenney of Alberta, and Industry Minister James Moore of British Columbia.