The position of William at Brussels after his triumphant entry, September 23, 1577, was by no means an easy one. His main support was derived from a self-elected Council of Eighteen, containing representatives of the gilds and of the citizens. This Council controlled an armed municipal force and was really master in the city. In these circumstances the States-General did not venture upon any opposition to the popular wishes, in other words to William, whose influence with the masses was unbounded. The States-General, therefore, under pressure from the Eighteen, informed Don John, October 8, that they no longer recognised him as governor-general; and the Estates of Brabant appointed the prince to the office of Ruward or governor of the province. Meanwhile a fresh factor of disturbance had been introduced into the troubled scene. Certain of the Catholic nobles opposed to Spanish rule, but suspicious of Orange, had invited the twenty year old Archduke Matthias, brother of the emperor, to accept the sovereignty of the Netherlands. Matthias, who was of an adventurous spirit, after some parleying agreed. He accordingly left Vienna secretly, and at the end of October arrived in the Netherlands. Not content with this counter-stroke, Aerschot went to Ghent to stir up opposition to the appointment of William as Ruward of Brabant. The populace however in Ghent was Orangist, and, rising in revolt, seized Aerschot and a number of other Catholic leaders and threw them into prison. They were speedily released, but the breach between the Catholic nobles and the Calvinist stadholder of Holland was widened. William himself saw in the coming of Matthias a favourable opportunity for securing the erection of the Netherlands into a constitutional State under the nominal rule of a Habsburg prince. By his influence, therefore, the States-General entered into negotiations with the Archduke; and Matthias finally was recognised (December 8) as governor on condition that he accepted the Union of Brussels, He was also induced to place the real power in the hands of Orange with the title of Lieutenant-General. Matthias made his state entry into Brussels, January 18, 1578. His position appeared to be strengthened by a treaty concluded with the English queen (January 7) by which Elizabeth promised to send over a body of troops and to grant a subsidy to the States, for the repayment of which the towns of Middelburg, Bruges and Gravelines were to be pledges.

The news however of the step taken by Matthias had had more effect upon Philip II than the despairing appeals of his half-brother. A powerful army of tried Spanish and Italian troops under the command of Alexander Farnese, Prince of Parma, son of the former regent Margaret, was sent to Flanders. Farnese was Don John's nephew, and they had been brought up together at Madrid, being almost of the same age. Already Philip had determined to replace Don John, whose brilliance as a leader in the field did not compensate for his lack of statesmanlike qualities. In Farnese, whether by good fortune or deliberate choice, he had at length found a consummate general who was to prove himself a match even for William the Silent in all the arts of political combination and intrigue. At Gembloux, January 31, Don John and Parma fell upon the levies of the States and gained a complete and almost bloodless victory. Had Philip supplied his governor-general with the money he asked for, Don John might now have conquered the whole of the southern Netherlands, but without funds he could achieve little.

Meanwhile all was confusion. The States-General withdrew from Brussels to Antwerp; and William, finding that Matthias was useless, began negotiations with France, England and Germany in the hope of finding in this emergency some other foreign prince ready to brave the wrath of Philip by accepting the suzerainty of the Netherlands. The Duke of Anjou, brother of the French king, was the favoured candidate of the Catholic party; and William, whose one aim was to secure the aid of a powerful protector in the struggle against Spain, was ready to accept him. Anjou at the head of an army of 15,000 men crossed the frontier at Mons, July 12; and, on the following August 13, a treaty was agreed upon between him and the States-General, by which the French duke, with the title of Defender of the Liberties of the Netherlands, undertook to help the States to expel the Spaniards from the Low Countries. But, to add to the complications of the situation, a German force under the command of John Casimir, brother of the Elector Palatine, and in the pay of Queen Elizabeth, invaded the hapless provinces from the east. The advent of John Casimir was greeted with enthusiasm by the Calvinist party; and it required all the skill and sagacity of the Prince of Orange to keep the peace and prevent the rival interests from breaking out into open strife in the face of the common enemy. But Don John was helpless, his repeated appeals for financial help remained unanswered, and, sick at heart and weary of life, he contracted a fever and died in his camp at Namur, October 1, 1578. His successor in the governor-generalship was Alexander of Parma, who had now before him a splendid field for the exercise of his great abilities.