ISLAMABAD, Feb 23 After months of confusing signals, the government finally confirmed on Tuesday that Shaukat Tarin had tendered his resignation as Finance Minister. The prime minister has accepted the resignation. He will continue working as finance minister until the end of this week.

“The resignation was formally accepted during his call on to the prime minister in his office at the Prime Minister's House here this afternoon,” an official announcement said.

Soon after his induction into the federal cabinet, Mr Tarin was able to secure an $11.2 billion bailout package with the International Monetary Fund when the country was on the verge of default on repayment of foreign loans.

“I have resigned today as a matter of principle. I have to raise equity from the market for the Silk Bank and I could not do that while working as finance minister because of a clear conflict of interests,” Mr Tarin told Dawn soon after his meeting with the prime minister where he submitted his resignation.

“At the moment that was the only reason,” he said in reply to a question.

There were also reports that he had developed differences with the PPP leadership over rental power projects and on issues of governance.

Mr Tarin is the third finance minister under the Gilani administration to have given up the prized but equally difficult job of managing a struggling economy in the face of terrorism and dwindling foreign investment.

Before Mr Tarin's induction into the cabinet in October 2008 as an adviser, Ishaq Dar of PML-N and Syed Naveed Qamar had served as finance ministers.

The resignation was followed by speculations about his possible replacement. Lending agencies based in Islamabad kept on enquiring of government high-ups about the background of Nasim Beg -- currently working with the Arif Habib Group -- who was believed to have been tipped as the new adviser on finance.

But this would raise issues of credibility because of Mr Beg's association with a group that was part of the abortive sale of Pakistan Steel Mills.

The only similarity between Mr Tarin and Mr Beg is their close family relationship with Karachi-based businessman Anwar Majeed, a friend of President Asif Ali Zardari.

The sources said that Dr Hafiz Pasha had declined President Zardari's request to lead the government's economic team. Some sources said Ishrat Hussain, the former State Bank governor, Minister of State for Finance Hina Rabbani Khar and Makhdoom Shahabuddin were among the contenders.

The official announcement said the prime minister “appreciated the contribution by Shaukat Tarin in turning around the sliding national economy” and hoped he would continue to extend his valuable advice to the government as and when needed and extend his services in the National Economic Advisory Council. Interestingly, only a day before the announcement of Mr Tarin's resignation, the Supreme Court had taken up for hearing a petition that questioned the sale of the Saudi Pak Industrial and Agriculture Company to a consortium led by him allegedly without the mandatory approval of the Council of Common Interests (CCI) and the cabinet committee on privatisation (CCOP). The court had cancelled the sale of Pakistan Steel Mills on the same principle. The enterprise created through the sale of Saudi Pak was later re-named as Silk Bank.

SECP OFFICIAL Meanwhile, Mohammad Sohail Dayala, the Securities Market Division Commissioner of the Securities and Exchange Commission (SECP), has also resigned from his post, our reporter adds.

Mr Dayala had earlier served as director at the Karachi Stock Exchange and has had long-standing professional affiliation with Mr Tarin.

According to sources in the finance ministry, the resignation of Mr Tarin was said to be the key reason for Mr Dayala's decision to quit his post.