The Chalet School has been at the Tiernsee for 4 years, and many of the original pupils have left. It is the school's third Winter term,and Joey Bettany is to be a sub-prefect. During the holidays, a new chalet has been built across the lake, and it turns out to be a new school.
An instant rivalry springs up between the Chalet School, and St Scholastikas, which leads to a number of incidents when the two schools meet. Pupils from both schools are stranded when part of the lake path caves in, and are forced into a long strenous climb to get home. Whilst this incident sees the beginning of some friendships between the two schools, it also serves to heighten the resentment felt by some St Scholastika girls, as does the fact that the Chalet School has Guides.
When the lake freezes enough for skating, girls from both schools are involved in an accident which leads to serious illnesses for Joey and Maureen O'Donovan, from St. Scholastikas. When the concern for them is over, the Middles break out with some practical jokes, which is countered by the famous powdered hair incident.
The term is ended abruptly with a chicken-pox epidemic in both schools. Old Chalet girl, Grizel Cochrane, turns up with her friend Gerry, just in time to help out. They witness even more of the rivalry between the schools, and are appalled. The final act of resentment from the "Saints", comes in the form of a letter to Princess Elisaveta in Belsornia, and this proves to be the end of the feud, as the headmistress of St. Scholastikas, horrified by what her students are capable of, finally allows Guides in the school.
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