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Gray was a favorite of King John of England, who named him Lord Chancellor in 1205, having paid John 5000 marks for the office.
He was named Bishop of Lichfield in 1210, but was not consecrated as bishop there.
Gray was then elected Bishop of Worcester on 20 January 1214, and resigned as chancellor in October 1214.
His consecration as Bishop of Worcester took place on 5 October 1214.
Gray was present at the signing of Magna Carta in June 1215.
While he was away from England on an errand for the king, he was appointed Archbishop of York, being elected on 10 November 1215 through the influence of John and Pope Innocent III.
John had wanted Walter, but, the canons of York felt that Walter was uneducated, and selected Simon Langton, brother of Stephen Langton Archbishop of Canterbury instead.
John objected, and wrote to Innocent III complaining of the election of the brother of one of his staunchest enemies, and Innocent agreed.
However, Walter in the end paid more than ₤ 10, 000 to the pope in various fees to get his election confirmed.
Walter attended the Fourth Lateran Council in 1215.

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