Smooth, that's even more paranoid than necessary. Toss the book to the Wardens and give them the complete rundown would be the best solution. Might even get them a freaking medal or a Dennys gift certificate or something, depending on if their social skills are good enough to get the Wardens to believe them completely.
Well, the opinion of the White Council in general is rather low by the group. They are seen by the PCs as a bunch of murdering thugs who are best to be avoided whenever possible. They certainly aren't seen as someone with authority by anyone but the Emissary, and are respected as much as the White Court or the Red Court is respected. Basically, they wouldn't trust the White Council with the knowledge contained in the book.
As for the Knight, if that's how he goes then all he has to do to remain clear is inform the Wardens and Senior council that he's going to continue looking into where the book came from and if there are any copies or similar works still floating around. Knights carry significant political weight and their motives are usually above reproach, or at least as near as is possible when dealing with political figures. They're also generally considered not to be under the Council's authority, even if they aren't signed on to the Accords.
Hmm... true, but I don't know if she would want to talk to the Wardens either. What would Shiro do, since he was her mentor? I'm asking because she's probably going to ask me, as the player hasn't read any of the novels.