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John admission into Bamburgh, and the duke, who had asked and received a safe-conduct from the Scots, retired to Edinburgh, where he was well entertained. From thence he wrote to the king to know what kind of reception he might look for if he returned. Richard replied by denouncing the calumnies spread abroad against his uncle, authorised him to travel under protection of a bodyguard, and ordered Northumberland to find men for him. Lancaster rejoined the king at Reading, and on 18 Aug. was appointed justiciary to hold inquisitions on outrages perpetrated by the insurgents. But the quarrel between Lancaster and Northumberland was not ended. A violent altercation in the king's presence, when the duke accused the earl for his hostile conduct in the north, resulted in the temporary arrest of the latter. In the parliament which met on 2 Nov. both attended with armed followers, and a reconciliation was only effected by Richard's personal intervention. Lancaster now regained some of his former influence, and in the same parliament was placed at the head of a commission of reform of the royal household.

Meanwhile his pretensions to the throne of Castile had been revived by the death of Henry of Trastamare in May 1379. The king of Portugal refusing to recognise his successor and appealing to the English for assistance in making war on Castile, the Earl of Cambridge was sent out with a body of troops to the Peninsula in 1381, and in the parliament which met on 27 Jan. 1382 Lancaster brought forward proposals for an expedition, to be undertaken under his command, which, however, were not favourably received. Again, in the parliament of October 1382 the necessity of supporting Cambridge was insisted on; but the king of Portugal made peace with Castile, and Cambridge returned home. Other events, the French invasion of Flanders and the defeat of Rosebecque, and the subsequent disastrous crusade of the Bishop of Norwich and its consequences, diverted attention from Lancaster's Spanish projects, and the opportunity for active interference passed away.

Affairs with Scotland also needed attention. The truce would expire at Midsummer 1383. Lancaster was named warden of the marches, 7 May, and held a conference with the Scots, 1 July. On 12 July the truce was extended to 2 Feb. 1384, with a view to a peace. Negotiations with France were likewise set on foot, and early in September ambassadors were appointed, with Lancaster at their head, to treat both with that country and with Flanders. But the pretensions on both sides were too extravagant to admit of adjustment, and a truce of only eight months was at length agreed to at Leulingham, near Calais, 26 Jan. 1384. Scotland was included in this truce; but, pending the negotiations, and regardless of their own special truce with England, the Scots had, at the close of 1383, made a sudden incursion into the northern counties. In retaliation forces were collected and placed under command of Lancaster, who invaded Scotland, 11 April 1384. But the Scots, wasting their own country and burning their towns, retired before him, and Lancaster, after felling and destroying parts of their forests, was forced, from lack of provisions, to retreat to the border, where the Earl of Northumberland was left to hold the Scots in check. This, failure again raised popular feeling against the duke. He was accused of slackness in pursuit, and of absolutely inflicting more injury on the northern English counties than on the enemy. When parliament met at Salisbury, 29 April 1384, a curious illustration of public feeling was presented in the accusation said to have been brought against him by a Carmelite friar of plotting the removal of the king. The friar, at the duke's request, was arrested and handed over to the custody of Sir John Holland, and while in his hands the unfortunate prisoner was assassinated, either from over-zeal in Holland on Lancaster's behalf, or even, as it was whispered, with Lancaster's connivance.

Negotiations with France and Flanders were now resumed, and Lancaster and his brother, Thomas of Woodstock, were named envoys. The truce, which was dated to expire on 1 Oct., was on 14 Sept. extended to 1 May 1385; but a permanent peace was impossible. Lancaster is said to have spent as much as fifty thousand marcs in this embassy. The Scots had already been brought into the truce. 20 July, but this did not prevent them from surprising Berwick sooa after, an event which is said to have given an opportunity to Lancaster for obtaining the condemnation of the Earl of Northumberland for neglect. The sentence was, however, revoked on his recapture of the place.

Towards the end of the year a serious quarrel broke out between the king and Lancaster. Richard is said, at the instigation of his favourites, to have plotted the sudden arrest of his uncle, who was to be condemned by the complaisant action of the chief justice Tresilian. Warned in time of his danger, Lancaster fled to his castle of Pontefract, which he fortified to withstand a siege. But the storm passed over, and after some delay a reconciliation was effected by the intervention of the Princess of Wales.