The Seventh Doctor and Ace visit Windsor, England in 1988, where three factions - the Cybermen, a group of Neo-Nazis and a 17th Century time travelling sorceress named Lady Peinforte - are each attempting to capture a weapon made of a living metal, Validium, created as the ultimate defence for Gallifrey. The weapon is now in the form of a statue of Lady Peinforte and has three components that must be brought together in order to be activated.
In order to foil an earlier attempt to control it, the Doctor launched the weapon inside an asteroid, into a 25 year orbit over 300 years ago. The asteroid now crashes back to Earth near Windsor Castle. The Doctor plays the three rival groups off against one other until eventually he appears to surrender the statue to the Cybermen. However, this is just another carefully-laid trap by the Doctor and the Cybermen warships are totally wiped out when they attempt to control the weapon.