The web, spun by Kao Chiu, has trapped Tai Sung, now a prisoner at the mercy of the Chu brothers. Meanwhile, back in the capital city, the Prime Minister accuses Kao of conspiring to steal the imperial taxes. Unfortunately, Chi Ching has underestimated Kao's cunning. Five hundred miles away, at the castle of Lord Chu, Lin Chung and the rebels of Liang Shan Po attempt to rescue Tai Sung. Even though separated by such a distance, each sword-cut, each drop of blood, every death, is Kao Chiu's doing.

The rebels of Liang Shan Po steal a year's worth of taxes from Kuang Chow province. Kao orders Squire Kuang - a man rich enough to have a private army - to attack Liang Shan Po. The Squire sends a spy into the heart of Liang Shan Po: Ju Hai, a corrupt priest. Ju Hai befriends Lu Ta and enters the water margins on the pretext of exorcising the evil spirit behind a plague that seems to have afflicted the rebels. Ju Hai sketches the defences of Liang Shan Po in readiness for an attack - and sends Lu Ta away, for a fateful encounter with his dying mother.

Squire Kuang and his evil brother, surmising that Lin Chung and Hua Yung are sure to visit Hua Yung's old archery teacher, set a trap. Kao Chiu is also due to arrive in Kuang Chow, with a plan to steal the emperor's jade and use Lin Chung as a scapegoat. Lin Chung and Kao Chiu find themselves face-to-face in battle - and with the rebels outnumbered, the people at last may be driven to take a stand against evil.

Evil Kao Chiu, aware that Lin Chung has left the safety of Liang Shan Po, discovers that Duke Chai Huang Chen has been appointed adviser in court etiquette. His nephew Chai Chin is a suspected Liang Shan Po sympathizer, and the Duke's daughter, Li Hua, is well-liked by the Emperor. Kao Chiu acts swiftly to protect his position, plotting the downfall of the Chai family. Chai Chin must kill Lin Chung, already in the capital city. Lin Chung, under the watchful eye of Shih Chin - the 'Tattooed Dragon' - and Hu San-Niang, must face Kao Chiu once more.

Lin Chung heads north with Li Hua, back to Kao-Tang Chow, a province rich in treasure and still largely untouched by Kao Chiu's evil reign. Kao orders two great armies, under the control of the Mongol Kao Lien, to conquer these lands, and capture Lin Chung. While Lin Chung tries to lead the brave farmers of Kao-Tang Chow to Liang Shan Po, Hu San-Niang must find the magus, Kung Sun Sheng, on retreat with his spiritual master - for only Kung Sun Sheng can oppose Kao Lien's Tibetan black magic.

China is under attack. General Huang Lung has been defeated, his army destroyed by the invading Mongol forces. Kao Chiu acts swiftly to appease the Emperor, recalling General Hu from political exile to lead China's forces against the invaders. With a string of successful campaigns the General soon beats back the Mongols; Kao is credited with choosing General Hu to lead such a vital campaign. Wary of General Hu, Kao hatches a further scheme, which sends the son of the General, Hu Yen-I, on a suicide mission against Liang Shan Po, hoping that this will spur General Hu into action. If one man can defeat Lin Chung it is his former commanding officer, General Hu.

Kao Chiu has invited an expert in gunpowder to the capital city, knowing that the secret of explosives and cannons will give him the crucial edge in his battle against Lin Chung and the honourable rebels. Unfortunately for Kao, the man and his son are attacked by bandits, and seek refuge at Liang Shan Po. Lin Chung and the rebel knights must persuade the man to stay and teach them the secret of gunpowder, for it is unthinkable that such weapons should fall into the wrong hands.

The army of the Tsengs has fought their way from Mongolia into China. Tseng Lung and his five brutal sons arrive in Chao Kai's village of Tung-Chi. Promised great rewards by Kao Chiu if they destroy Liang Shan Po, the Tsengs hold the women and children of the village hostage. They will be released, in return for Lin Chung. Chao Kai must return to his village - and discover his destiny.

With Lin Chung held by the Tsengs, and the rebels mourning the death of one of their leaders, Kao Chiu travels to Tung-Chi to gloat on his victory. The knights of Liang Shan Po begin to infiltrate the occupied village, disguised as entertainers, fortune tellers and tradesmen. Hu San-Niang uses her beauty to set two of the Tseng brothers against each other. As they fight for her affections, the heroes try to free Lin Chung. With Kao so close, the rebel knights will not have long.

Kao Chiu continues to corrupt the boy Emperor, ensuring that he is surrounded only with the weak and self-indulgent. The emperor is, however, becoming more independent, and soon falls for the affections of a courtesan called Li Chih. Kao is pleased with the diversion, but, fearing the Emperor may grow tired of, the concubine, he plans to bring Feng Hsien, the daughter of one of China's wealthiest nobles, to the city as a candidate for marriage. Unfortunately, her journey will take her close to the water margins of Liang Shan Po. Lu Ta and Shih Chin travel to the capital, hoping to persuade Li Chih to tell the Emperor of the evil of Kao.

Kao Chiu's brother-in-law Liang Chung Shu is the governor of Peking, also the home of the wealthy Lu Chin-I and his daughter Feng Hsien. Liang Ch Shu and the wife of Lu Chin-I are lovers, and conspire together to steal Lu Chin-I's fortune - a fortune equally important to the future of Liang Po. After returning from a meeting with Lin Chung. Lu Chin-I is accused of treason, and captured. As the rebels seek to rescue Lu Chin-I, only his daughter Feng Hsien knows that Kao has arranged a trap for them.

The spirit of revolt grips China, with the Mongols back at the borders. Kao Chiu has, without the Emperor's seal, declared martial law in the capital city. He recalls General Kuang Sheng from the north, where he has been defending the Great Wall against the Hun. Kao blames the rebels of Liang Shan Po for the death of Lin Chung's wife, and promises a great reward if Lin Chung himself is brought to justice - knowing full well that Kuang Sheng, a former friend of Lin Chung, is the only man in China who can now defeat Liang Shan Po.