Leela leaps up and rips the circlet from the Doctor's head, while Borusa insists the Matrix has rejected the Doctor. The Surgeon-General has the Doctor taken away for treatment while insisting the Doctor is President over Borusa's objections. The aliens grow impatient and increase speed toward Gallifrey.
Borusa and Leela go to visit the Doctor, who has recovered. Borusa claims Leela tried to kill the Doctor and the Doctor orders her exiled outside of the Citadel, as aliens aren't allowed. Leela makes a break for it and Andred alerts the guards. The Doctor continues to spar with Borusa and warns that they are all in danger as long as Leela is at large in the Citadel.
In Borusa's office, the Doctor quickly recovers and dons the Sash of Rassilon, but realizes he can't leave with the guards outside. He finds a hidden passageway and manages to figure out it's keyed to a certain phrase, then opens it and leaves. Leela spots him and secretly follows him, while Andred and Kelner spot him and Leela on the security monitors and Andred goes to get her. The Doctor goes to the TARDIS and seals it, leaving Leela outside to be arrested. The Doctor and K9 can hear her pounding on the doors but ignore her and she is forced to run away.
While Andred tries to get into the TARDIS, the Doctor and K9 compute the odds of his plan's success. The odds increase significantly once the Doctor reveals he knows where the security chamber is and plans to tamper with the transduction field. K9 notes the odds of the Doctor's plan increase significantly if that occurs.
Leela makes her way to Space Traffic Control center where she confronts Rodan, the Time Lady in charge of the facility. Rodan is unimpressed with Leela and can't be bothered to tell security about the alien. She notes that no one can bring down the transduction barriers. Meanwhile, the Doctor emerges from the TARDIS to confront Andred and repeat his instructions to have Leela exiled. Kelner, who has been monitoring the situations, begins to consider his own plans.
After Andred leaves with the Chancellery Guards, another guard arrives with the keys, and K9 stuns him as he emerges and goes on his mission. Kelner confronts Borusa who wants to see the Doctor. They return just in time to find the Doctor back in the room having come back through the secret passage. Kelner keeps his silence about the Doctor's whereabouts and the Doctor calls a council meeting. Rodan lets Leela into the control center just as she picks up an alien ship approaching Gallifrey and raises the transduction barrier. Beneath the Citadel, K9 destroys the transduction circuitry and Rodan sounds the alert. In the Pantopticon, the Doctor confronts the council and introduces them to their new masters… the Vardans. The aliens teleport in as the Doctor laughs maniacally.