If you go to see the king with both the Axe of Stone and the letter to Gregor, the guards will let you keep them. If you only bring one, though, and come back later with the second, they can remove it from your inventory (you can throw it past them and pick it up after entering, or bypass the guards entriely [throw a teleporter pyramid in, a mage can use their Swap Places special move, or you can kill the guards
by casting Poison Cloud near but not directly on them, to do damage and kill them without triggering combat or loosing reputation]).
If you don't have a save before giving the items to the council member, and the dialog options do not come up with the king, there is a way to replace the items:
Lost Items - guide and directory of inventory files.