* Kirchner was contender for 2011 presidential race

* He oversaw Argentina’s recovery from economic crash

* Critics saw him as divisive, authoritarian figure

* Argentina asset prices rally following news (Adds color, fresh quotes and details)

By Helen Popper and Nicolas Misculin

BUENOS AIRES, Oct 27 (Reuters) - Former Argentine President Nestor Kirchner, the current president’s husband and a leading contender to succeed her in next year’s election, died from a heart attack on Wednesday.

Kirchner, 60, was credited by many Argentines with putting South America’s No. 2 economy back on its feet after a devastating 2001/02 economic crisis, but critics reviled his combative style and interventionist economic policies.

Argentine bond and stock prices rose on news of the death of the center-leftist, who kept a firm hold on the reins of power even after his wife Cristina Fernandez was elected to succeed him in 2007.

“It was a sudden death,” Kirchner’s doctor, Luis Buonomo, told Reuters after the former president died in the Patagonian tourist city of El Calafate, where he and Fernandez have a weekend home.

His death raises uncertainty about the government’s strategy for next year’s election, and might encourage Fernandez to seek a second consecutive term.

Kirchner was still a popular leader when he left the presidency but his approval ratings have since fallen sharply and his wife has emerged as the more popular of the two.

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Full coverage of Kirchner’s death: [ID:nARGENTINA]

Political risks in Argentina: [ID:nRISKAR]

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Kirchner started his political career in the Patagonian province of Santa Cruz, where he was governor for many years, and he was elected president as a virtual unknown in 2003 on the ashes of the economic meltdown,

A member of the dominant Peronist party, he quickly built strong alliances and oversaw a strong economic recovery that won him solid backing. He would almost certainly have won a second term in 2007 but instead chose to make way for his wife.

At the capital’s pink presidential palace, the blue-and-white national flag was flying at half mast on Wednesday and supporters tied roses and messages of support to the railings, some reading “Thank you Nestor.”

“It’s very sad. Although we didn’t support his policies, we didn’t want it to end like this, I think the whole country will feel the same way,” said psychologist Diana Arazi in downtown Buenos Aires, which was unusually quiet on Wednesday due to a national holiday called to conduct a census.

STATE CONTROL

Critics branded Kirchner’s tough political style and strongly worded attacks on big business, journalists and political rivals as authoritarian.

When farmers rebelled over a tax hike on soy exports in 2008, he accused them of plotting a coup and told supporters to boycott companies that hiked prices. He increased state control over the economy and nationalized several companies.

Kirchner focused on cementing political alliances at home to shore up his administration and that of his wife, but he was secretary general of South America’s regional grouping Unasur and had close links with fellow Latin American leftists such as Venezuela’s Hugo Chavez, who called his death “a huge loss.”

Chavez declared three days of national mourning and leaders including U.S. President Barack Obama and Chilean President Sebastian Pinera sent messages of condolence.

Felipe Sola, an Argentine lawmaker who split from the government to join the ranks of a dissident Peronist party wing, called his rival Kirchner “a formidable fighter.”

“I’ve criticized him and I’ve defended him, but I’ve always admired his ability and recognized him as a unique politician,” Sola said.

Kirchner also won praise for his efforts to bring military leaders to trial for human rights crimes committed during the nation’s 1976-1983 dictatorship, in which as many as 30,000 people were killed in a crackdown on leftist dissent.

When his wife succeeded him, many commentators compared the power couple to another husband-and-wife political dynasty to dominate Argentine politics -- former President Gen. Juan Domingo Peron and his famous wife Evita.

Although he never formally confirmed his candidacy, Kirchner was widely expected to run at the next presidential election in October 2011, but concerns over his health increased after he underwent arterial procedures in February and September.

His wife’s government said Kirchner was rushed to hospital in the early hours of Wednesday after suffering an apparent heart attack. Fernandez was with him when he was taken ill.

Investors disliked Kirchner’s unorthodox economic policies, such as price controls and export freezes to curb inflation. Those policies have largely continued during his wife’s administration, and Argentine financial assets abroad rallied on news of his death.

“For Argentina, as a credit and a country that is the recipient of investors’ money, there is no better scenario than having Kirchner out of the political arena,” said Roberto Sanchez-Dahl, an emerging market debt manager.

Argentina's portion of the JP Morgan EMBI Plus sovereign bond index 11EMJ tightened 42 basis points to 540 basis points in morning trade, the tightest level in more than two years. The index overall was just 4 basis points tighter.

U.S.-traded shares of Argentina's BBVA Banco Frances SA BFR.N rose 4.6 percent to $12.50 while Tele Argentina TEO.N gained 9.71 percent to $24.97.

Argentina’s financial markets were closed for the holiday. (Additional reporting by Eduardo Garcia and Luis Andres Henao in Buenos Aires, Sujata Rao in London and Guillermo Parra-Bernal in Sao Paulo; editing by Kieran Murray)