British Columbia's Opposition New Democrats have reached a compromise with a leadership candidate who refused to hand over his social media passwords as part of the party's vetting process.

The dispute threatened to derail Nicholas Simons' candidacy, prompted a formal investigation by the province's privacy watchdog and raised questions about how parties scrutinize candidates' Internet personas to ensure they don't contain potentially embarrassing headline fodder.

Simons was the only candidate to refuse the request, arguing it would violate his privacy and the privacy of everyone in his Facebook network.

Late Monday afternoon, the party and Simons issued statements signalling that they've settled the impasse.

In the end, Simons didn't turn over his passwords. Instead, he convinced the party that everything on his Facebook profile is publicly accessible -- that is, there's nothing hidden behind privacy settings that party officials visiting the site couldn't see for themselves. The party then reviewed the profile, and says it's satisfied there's nothing of concern.

"I'm proud of my party for recognizing the importance of a good vetting process for candidates and the importance of protecting privacy," Simons said in a written statement.

"I look forward to becoming an official candidate for the leadership of the B.C. NDP. This is an example of creating good policy that works for our province and our party."

All of the other candidates running for the April 17 leadership vote complied with the request, but some expressed reservations after the controversy surfaced.

The party implemented the policy after one of its candidates in the 2009 provincial election saw his campaign sidelined after racy Facebook photos were leaked to the media.

The NDP had defended the practice, explaining that the lives of party leaders are far more public than ordinary citizens.

The party also noted it gave the passwords to an independent researcher, who signed a confidentiality agreement. NDP officials weren't permitted to login themselves, the party said.

But the province's information and privacy commissioner, Elizabeth Denham, suggested the practice may run afoul of the province's privacy laws, which set limits on the type of information companies and other bodies -- such as political parties -- can collect.

Denham called the policy "problematic," and suggested there may be other less-intrusive ways to ensure candidates don't get caught posting embarrassing things on the Internet, such as education about appropriate online behaviour.

She's launched a formal investigation, which she said would likely take several weeks, and will make recommendations to the party.

B.C.'s provincial New Democrats aren't the only ones to have candidates land in trouble over their online activities.

The 2008 federal election, for example, saw several candidates who didn't make it to the end of the campaign.

Dana Larsen -- who happens to be one of Simons' rivals in the B.C. NDP leadership race -- was burned by social media during the 2008 federal campaign, when he was running for the New Democrats in the riding of West Vancouver-Sunshine Coast. Larsen was forced to step down because of online videos that appeared to show him using LSD and smoking marijuana.

Andrew McKeever, an Ontario candidate, also dropped out in 2008 after online postings came to light in which he used obscenities to refer to a woman and threatened to beat up a critic.

And Chris Reid, the federal Conservative candidate running against Liberal Bob Rae in downtown Toronto, dropped out of that election over his online musings about gays, women, guns and the Greyhound bus beheading.