B.C.'s embattled solicitor general Kash Heed has resigned from cabinet once again, following revelations that the firm of a special prosecutor assigned to investigate his election campaign had donated directly to it.

The resignation is the latest twist in a complicated political story stemming from allegations involving an unregistered campaign brochure that led to charges against two of Heed's top campaign workers earlier this week.

Meanwhile, the B.C. Law Society says it has launched an investigation into the conduct of special prosecutor Terrence Robertson, who now finds himself at the centre of the growing political scandal.

Heed's second resignation was announced in a statement released on Wednesday morning by a spokesman from Premier Gordon Campbell's office.

B.C. MLA Kash Heed was reappointed to cabinet on Tuesday, only to step down again on Wednesday morning. (CBC)

"Mr. Heed has advised Premier Gordon Campbell that he has decided to immediately step aside as minister of public safety and solicitor general," said the statement.

"Mr. Heed anticipates a new special prosecutor will be rapidly reappointed and is confident that individual will confirm the findings of his predecessor which was the basis for his reappointment into cabinet," it said.

Campbell reappointed Attorney General Mike de Jong as acting solicitor general — the same post he filled when Heed resigned the first time.

Firm donated $17K to B.C. Liberals

Heed was reappointed to cabinet on Tuesday afternoon after Robertson announced on Monday that his investigation into Heed's 2009 election campaign cleared the Vancouver-Fraserview MLA of any wrongdoing.

Robertson did recommend charges against two of Heed's top campaign workers and one other man allegedly involved in the printing and distribution of the unregistered brochures.

But in a statement released less than an hour after Heed's reappointment, Robertson said he was stepping down from his position as special prosecutor in the case because his firm had donated $1,000 to Heed's 2009 election campaign.

Later that evening Heed decided he would still take the oath of office from the lieutenant-governor and was officially back in cabinet.

But then after going home and discussing the issue with his wife, Heed reconsidered and called the premier the next morning and told him he was once again stepping down.

"I am going to step aside. I don't want to go through this," Heed told reporters on Wednesday morning.

New Democrat Mike Farnworth said the premier showed poor judgment in reappointing Heed to cabinet while the criminal prosecution of his top campaign workers was still underway.

"He had no choice but to resign. The idea of Mr. Heed staying as solicitor general was just untenable," said Farnworth.

But in a phone call from Amsterdam, the premier defended his decision to reappoint Heed, saying the former solicitor general had conducted himself properly.

"He is unfortunately… one of the people who has been let down by this process," said Campbell, who is in Europe on a government trip.

Special prosecutor saw no conflict

In a letter outlining the reasons for his resignation issued on Tuesday, Robertson said he was aware of the contribution before taking on the investigation, but he said he "did not believe that it was a conflict of interest" that would preclude him from acting as special prosecutor.

Vancouver lawyer Terrence Robertson has served as a special prosecutor for the B.C. criminal justice branch on numerous cases. (CBC)

Robertson said that upon further reflection, he has concluded that continuing as special prosecutor would provoke "comment from the public and the media" as to whether he is sufficiently independent. But he said he had "complete confidence" his investigation was entirely objective.

However, B.C. Liberal Party financial disclosure statements filed with Elections B.C. show Robertson's law firm, Harper Grey, donated a total of more than $17,000 to the party in the three years leading up to the last election.

The documents show the largest donation came in 2009, when the firm donated $9,500 to the Liberals in the leadup to the May 12 provincial election. There is no record of Harper Grey donating to the NDP in those years.

On Wednesday morning the firm's managing partner, John Brown, who is listed on the disclosure statements as the contact for the donations, declined to comment on them.

But later in the morning, the B.C. Law Society confirmed it was investigating whether Robertson committed any form of professional misconduct that would warrant any action by the law society.

Campaign workers charged

Heed had originally stepped down from office in April when it was revealed the RCMP was conducting an investigation into his campaign in the Vancouver-Fraserview riding.

The investigation was related to an unregistered election campaign brochure, which accused the NDP of planning to legalize heroin and cocaine and said the party would consider instituting an inheritance tax.

Barinder Sall, Heed's campaign manager, faces six charges, three of which are criminal, including two counts of obstruction of justice.

Sall also faces three charges under B.C.'s Elections Act, including one count of illegal election advertising.

Satpal Johl, Heed's financial officer, faces charges under the Elections Act in relation to election financing.