The design competition run by Lorraine at Waterloo Road is hotting up, and with 5,000 pounds up for grabs, the students are keen to impress. Young student Morag is excited about her entry, but when Tom drives round to her house to pick it up, her father enquires about what the prize is. His family live a simple life without material possessions or technology, but when he hears that the prize for the best bench is monetary, he completely flips. Tom tries to calm him down, but before long, Mr Murray is asking his daughter Morag to take an axe to her entry. With tears in her eyes, she ruins her bench. Meanwhile, Madi tells Sian that she's found a job that she wants to take up on a cruise ship. Sian is sceptical that Madi would be throwing away her education. Adamant that she's making the right choice, Madi decides to leave Waterloo Road for good. Then, back at school, Tom talks to Morag about the chance of making a new bench for the competition. He offers to help her, and she agrees. Excelling in the competition, she wins first prize - the 5,000 plus an extra grand. Her father is furious and threatens to take her out of the school she loves. Then, when Tom comes clean to Michael about the fact he helped Morag, Michael is fuming. Then, Christine promises Connor that she has finally stopped drinking. He believes her, and they begin to grow close. However, he soon finds out that she has been lying to him again, and furious and angry, Connor pours lighter fluid all over the winning benches. Fortunately, Michael arrives before he has the chance to set them alight.
