In an emotional press conference outside the Old Fire Hall Thursday afternoon, New Democratic Party Leader Todd Hardy announced he's stepping aside.

First elected in October 1996 before rising to the party's helm in September 2002, Hardy informed the party's inner-circle of his intentions in December, but went public with the news Thursday.

Hardy, who was diagnosed with leukemia in the summer of 2006, said deteriorating health factored in his decision.

He said he was told in December his leukemia has returned, and that doctors have placed him on a drug they believe will keep the cancer at bay for two years. There have been no recommendations for treatment beyond that point, he said.

Hardy, 51, recently returned to Whitehorse after receiving medical treatment in Vancouver.

"The other reason I'm stepping down is I believe very strongly in the party," Hardy said. "Anytime you embark on a rebuilding process, you need a leadership race (and time to do that)."

In the meantime, Hardy will retain his Whitehorse Centre seat in the legislature. He will also continue in his capacity as leader of the third opposition party until a convention, expected this fall, determines his successor.

The NDP clearly faltered under his guidance, losing two MLAs to the Yukon Liberal Party and official Opposition status in 2006. However, Hardy looked back on the positive contributions he and the party made to the territory's politics.

"Over the last six years, what we have been able to do ... is shape a government and direct a government to make major changes in legislation," he said.

"There have been many changes, and you know them. My only regret is that we never formed the government."

Among those changes is anti-smoking legislation Hardy and the NDP lobbied for and were successful in bringing to fruition.

But it is the defections of three MLAs from the NDP caucus during Hardy's tenure, most recently McIntyre-Takhini MLA John Edzerza,who left the party in January to sit as an independent.

Yesterday, Hardy accepted the blame for what's become of the party that formed the Yukon's government three times between 1985 and 2000, but withered under his watch.

"It's my responsibility, and that's one of the reasons I've stepped down as leader," Hardy said.

Yukon NDP president Boyd Pyper was with Hardy at Thursday's press conference,

"I take some responsibility for the state of things; we're not going to B.S. anybody; we're down in a bit of a valley at the moment and Todd Hardy, as a leader, also takes responsibility for that," Pyper said.

"We're beset with some difficulties and victims of our own fate. But I have huge amounts of respect for Todd. He's straightforward, the cards are on the table and you know who you're dealing with. And the way I was raised, that's the man I want as my leader."

After Mayo-Tatchun MLA Eric Fairclough defected from the NDP to sit with the Liberals, the former Little Salmon-Carmacks First Nation chief said he thought Hardy was steering the party too far to the left.

But Audrey McLaughlin, the former federal NDP leader and Yukon's member of Parliament from 1987 to 1997, disagreed.

"I don't think so. In terms of policy review, it's an ongoing process in any political party," McLaughlin told the Star today, adding now is the time to honour Hardy.

"I think the party (under Hardy's leadership) has continued the policies, more or less, of previous Yukon NDP governments."

But McLaughlin acknowledged there is a need to rebuild.

"Whenever you have decreasing number of elected members, then you have to begin reaching out in some way, both for new folks and some of the folks who may not have been involved recently.

"I do think there's a strong core of people interested in the NDP party."

And Premier Dennis Fentie used to be part of that core, elected to the legislature in 1996, representing Watson Lake under the NDP banner.

Before switching allegiance to the Yukon Party and winning the 2002 and 2006 elections, Fentie worked with Hardy. This morning, Fentie reflected on his legislative rival much the same as Pyper.

"Todd Hardy is certainly consistent when it comes to the principles he espouses - everybody knows that," Fentie told the Star.

"And I think the evidence shows we've been able to work together on a number of initiatives in the public's interest."

With Edzerza set to sit as an independent and Hardy on the way out, Steve Cardiff, the NDP MLA for Mount Lorne, had no comment this morning on whether he will seek the party's leadership.

"I'm not going to say anything today ... right now my main concern is for Todd and his family and in doing my job, " said Cardiff.

"We need to absorb what it is that Todd said and we'll deal with the rest of it at a later date."