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George Carew was on his way to Cork with reinforcements, thought it prudent to decamp. He returned by forced marches to Ulster, and by doing so avoided Mountjoy, who was preparing to intercept him in Westmeath.

Shortly after his return he received welcome intelligence that a ship from Spain had arrived at Donegal bearing on board Mathew de Oviedo, titular archbishop of Dublin, with letters from Philip III, and considerable supplies of money and ammunition to be divided between him and O'Donnell, together with a phœnix feather (penna phœnicis) from Clement VIII for himself, and indulgences for all who should rise in defence of the faith. On 15 May Sir Henry Docwra [q. v.] landed with four thousand foot and two hundred horse on the shores of Lough Foyle; and, in order to assist him in establishing himself firmly at Derry, Mountjoy drew down with the army to Newry. These tactics were successful, and the continued efforts of Tyrone and O'Donnell during the summer proved inadequate to dislodge Docwra, who was assisted by Sir Art O'Neill, Turlough's eldest son, and later by Niall garv O'Donnell [q. v.] During the summer Mountjoy was occupied in settling the disturbed districts of Leix and Offaly, but in September he established his camp at Faughard, near Dundalk, with the intention of conducting a winter campaign against Tyrone. There was some sharp fighting in the Moyry Pass, where Tyrone had entrenched himself, but he was compelled to retire to Armagh. He was unable to prevent the erection of fort Mount Norris; but Mountjoy, finding insufficient forage for his horses, contented himself with offering a reward of 2,000l. for his apprehension and 1,000l. for his head, and retired to Carlingland, skirmishing all the way with Tyrone, who narrowly escaped being shot. During the winter Tyrone stood on the defensive. In May 1600 Mountjoy again invaded Ulster, and meeting with no resistance from Tyrone, he had penetrated as far as Benburb, and was making preparations in connection with Docwra for a winter campaign, when he was suddenly called south by the news that the Spaniards were preparing to land at Kinsale (September).

But it was not till the beginning of November that Tyrone was able to put his army in motion, and the month was fast drawing to a close before he united his forces with those of Hugh Roe O'Donnell at Bandon. Hemmed in by the forces of the crown, and weary of his enforced inactivity, Don John d'Aquila, the Spanish commander, urged a combined attack on the English lines. Tyrone and O'Donnell, who seem to have been agreed on the expediency of starving out the besiegers, yielded to his pressure, the former very reluctantly, and it was resolved to make a joint attack on Christmas morning. The plan was betrayed to Mountjoy, who, being forewarned, was also forearmed. The attack was badly managed, and when morning broke the Irish fell into confusion on finding themselves confronted by a well-prepared and active enemy, and withdrew in disorder to Inishannon. The situation was far from hopeless, and Tyrone was strongly in favour of a fresh attempt, but his opinion was overruled by O'Donnell, who very unjustly laid the blame of the failure on Don John d'Aquila, and immediately sailed for Spain in order to solicit fresh assistance from Philip. After his withdrawal, Tyrone returned to Ulster, when was fulfilled the saying of O'Donnell that ‘they which did kiss them in their going forward, did both strip them and shoot bullets at them on their return; and for their arms they did drown them and tread them down in every bog and soft place.’ According to Carew, a troop of women could have beaten Tyrone's army on its homeward march.

During his absence, Docwra had established a fort at Omagh; and Tyrone, after burning Dungannon, retreated into the fastnesses of Glenconkein. He pleaded earnestly for pardon, and the queen, after much hesitation, authorised Mountjoy to promise him his life. But Tyrone was by no means at the end of his resources, and refused to make an unconditional surrender, knowing that if the worst did indeed come to the worst he could always effect his escape into Scotland, where he hoped, and not without reason, to find a sympathiser in James VI. In August Mountjoy established a garrison at Augher, and broke down the inauguration-stone of the O'Neills at Tullaghoge; but though the end was far from doubtful, it was uncertain how long Tyrone might succeed in evading his efforts or those of Docwra and Chichester to capture him. In February 1603 Elizabeth authorised Mountjoy to promise him life, liberty, and pardon, with restoration, on certain conditions, of his estate, and on these terms he consented to treat with Sir William Godolphin and Sir Garret Moore. The fact of Elizabeth's death, which occurred in the interval, was carefully concealed from him; and on 3 April, in entire ignorance of it, he submitted to Mountjoy at Mellifont. He abjured the title of O'Neill, renounced all dependency on any foreign prince, especially on the king of Spain, and promised to forbear all intermeddling with the urraghs. Accompanying Mountjoy