The local paper publishes a damning report on Havelock and Findlay's slovenly attitude on the day the school is competing in a quiz and road race with Watrloo Road. Havelock's star athlete Liberty Gordon sold the story and asks ex-Havelock teacher Audrey to get her into Waterloo Road. At the quiz Waterloo Road thrashes Havelock and,though Liberty wins the race,she is seen to be taking drugs - actually her invalid mother's pain-killers as she believes she is arthritic. Findlay is discredited as he was aware of the drugs and after a confrontation with Audrey when he loses it agrees Liberty should change schools. Janeece continues to exploit Daniel as a child minder for her baby Cheryl,dumping her on him in class whilst Connor believes he has got through to Christine when she agrees to seeing a doctor after falling downstairs drunk. Sian promises Billy,who is terminally ill,she will reconcile him with Michael and Scout is the victim of a nasty hoax by fellow pupil Rhiannon.