Created Duke of Albany before 1458, he also received the earldom of March, and lordships of Annandale and the Isle of Man. In 1460 he travelled to the continent, and to Guelders, the land of his maternal family. On his return in 1464 he was captured by the English. He was soon released, and as he grew to manhood began to take part in the government and defence of Scotland, being appointed in quick succession Lord High Admiral of Scotland and Warden of the Marches. Some of his actions on the marches aroused suspicion, suggesting sharp practice and a policy of border violence and truce breaking against England that contravened James III's 1474 marriage alliance. In 1479 the seat of his earldom of March was seized, although accounts of his imprisonment in Edinburgh Castle at this time appear to be mis-dated. Albany fled by sea to Paris where in September 1479 was welcomed by King Louis XI, and received royal favour by his marriage to Anne de la Tour. Louis, however, would not assist him to attack his brother the king, and crossing to England he made a treaty with King Edward IV at Fotheringhay in June 1482.
By the Treaty of Fotheringhay he promised to hold Scotland under English suzerainty in return for Edward's assistance and to deliver the southern shires into English possession. With Richard, Duke of Gloucester, afterwards King Richard III, he marched at the head of one of the largest English armies to be assembled after the Wars of Independence—20,000 men—to Berwick, which was seized (the last time it would change hands between England and Scotland) and then (with a smaller force) to Edinburgh. Meanwhile James III was seized at Lauder Bridge as he marched to face the invasion, and was imprisoned in Edinburgh Castle. It has been suggested that there was a conspiracy between Albany and a group of magnates who had been excluded from power in the 1470s, including the king's Stewart half-uncles, the earls of Atholl, Buchan and the bishop-elect of Moray, although evidence is limited. Gloucester, meanwhile, seems to have been satisfied with the seizure of Berwick, and left Edinburgh on 11 August. At that point the 'Lauder Lords' in Edinburgh Castle emerged and began to work with Albany to create a new government whereby by early October Albany had become lieutenant-general of the realm, and taken the earldom of Mar, along with the restoration of his former lands and offices.
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