In 1866, the German Confederation was dissolved, leaving Luxembourg a sovereign nation again. Napoleon III of France stepped in and offered to buy it from William III, the third grand duke. They even got as far as agreeing a sale price -- five million florins -- but William III reneged on the deal following pressure from Otto von Bismarck, the Prussian chancellor then emerging as central Europe's dominant figure. Events spiralled into a diplomatic standoff known as the Luxembourg Crisis, and almost led to war between Prussia and France. A compromise deal was needed, and it came in 1867 in the form of a second Treaty of London. Prussia withdrew its garrison from the capital, the city's fortifications were dismantled, Luxembourg became a fully independent nation ruled by the House of Nassau, and was declared neutral #145;in perpetuity'.   A Benelux divorce William III died in 1890 without a male heir, leaving his daughter Wilhelmina to succeed him. But Luxembourg's ascendancy laws prevented the new Dutch queen from becoming grand duchess, so the union with the Netherlands ended, and the grand duchy passed to Wilhelmina's cousin, Duke Adolf of Nassau.

Luxembourg was finally truly independent.  .