When Peggy returns to Walford in 2005, she is furious to discover Sam has lost possession of The Queen Vic - with the new licensee now being Sharon's stepmother Chrissie (Tracy Ann Oberman). Later on, Peggy learns from Sam that she is framed by Chrissie for the murder of the latter's late husband Den Watts (Leslie Grantham). While trying to exonerate Sam and reclaim ownership of the pub, Peggy is surprised to learn that Johnny is now the square's new gangland kingpin and the two establish a feud when he also wishes to buy The Queen Vic. Johnny hires a mobster to assault Peggy, but she is saved by her sons Phil and Grant at the last minute. They are able to deal with Johnny, secure Sam's release from prison, and return Peggy to The Queen Vic. Peggy begins a romance with Jack Edwards (Nicky Henson), the father-in-law of Peggy's nephew Billy (Perry Fenwick). However, when Peggy discovers Billy's newborn daughter Janet (Grace) has Down syndrome, she declares that the baby should be put up for adoption - causing friction in her relationship with Jack as a result. Although Peggy eventually comes to accept the baby, Jack breaks up with her and leaves Walford for good.