Danzo's expression became even more grim on hearing Hiruzen's words. He had known Hiruzen for too long and knew that he wasn't bluffing. While Danzo wasn't a weakling and wouldn't be afraid if Fujin or even some other Kages said it, it was different with Hiruzen. He knew that even with Shisui's eye, Hashirama's cells and Izanagi, he wouldn't stand much chance against Hiruzen.
He asked, "You will kill someone who has worked with you for over 6 decades, given everything to the village including my limbs just because that boy accused me of something that I didn't do?"
Danzo knew Hiruzen had a soft spot for him and the other two elders. The four of them truly had been through thick and thin together. Even though Danzo did many things that opposed Hiruzen directly or indirectly, this was the first time Hiruzen had threatened him in this manner.
Hiruzen didn't back off and replied, "I wouldn't have a choice. Fujin isn't Shisui or Itachi. Both of them matured too quickly because of the Uchiha Coup. When you attacked Shisui, both he and Itachi thought about the village and didn't retaliate as the Uchiha clan will get a reason for officially launching a coup. Shisui chose to take his life while Itachi kept his mouth shut. As a result, you didn't face any consequences for your actions.
Even though Fujin is mature for his age as well, he hasn't gone through something similar. If you attack, he won't see any reason to not retaliate and start a huge fight. A fight that will alert everyone. Once it is out in the open, I won't have a choice but to kill you.
Even if you kill Fujin without giving him a chance to retaliate, your actions would show that you'll target every new rank S ninja that appears in Konoha irrespective of how loyal he or she is to the village. As Fujin said, your past contributions mean nothing if your current actions actively harm the village. Konoha will be better off without you if you fall that low."
He took a pause before continuing, "I forgave your previous actions because I hoped that you did what you did believing that it was for the good of the village. However, your actions have long stopped being for the good of the village, Danzo. If you were to continue down this path, then I would forget our friendship and comradery and kill you with my own hands."
Hiruzen's tone was extremely serious. It was the same when he disbanded Root after the Uchiha Massacre. Danzo understood that he wouldn't be able to change Hiruzen's mind. Fortunately, he had a few more cards.
He asked, "What about the Root Laboratory? Will you be bringing it to the open? You know very well what consequences it will have if what happens inside gets leaked to the public."
Hiruzen thought for a few seconds and asked, "Do you still want to continue experimenting?"
As he said, Hiruzen's eyes lingered on Danzo's bandaged arm. Danzo replied, "There is no one else in the village who could handle that."
Hiruzen replied, "Alright. You can keep control over the laboratories. The Root headquarters won't be rebuilt as the laboratories weren't harmed. The top 3 floors will be just cleared out. You only need 5 Root ninjas to work in the labs. I'll let you choose 5 more Root ninjas to act as your guards. These 10 ninjas are all you would have under your control.
Your remaining Root ninjas, including the ones teaching the rescued kids and the ones undercover in Fire Capital, will be inducted into the Anbu. The rescued kids will be taken away from Root as well. I'll make arrangements for them and integrate them into the village.
From now onwards, you don't have the authority to spy on or take action against anyone inside Konoha. Nor do you have any authority to order anyone around. Your subordinates won't keep an eye on Naruto either.
In addition, I'll be taking away your vote in the Council. Your only authority will be within the Root Laboratories where others won't be allowed to disturb you. If you were to break any of these rules, then I'll take away the laboratory as well as the remaining 10 Root ninjas."
Danzo's eyes widened at how thorough Hiruzen was this time. With so few subordinates, he truly didn't have any room to maneuver. He had added plenty of restrictions on Danzo on top of it. And, by taking away the kids, Hiruzen had cut off Root's future. However, the biggest blow was taking away his vote in the Council. Without having an influence in the Council, reviving Root would be a herculean task!
He immediately said, "I am an Elder in the village. Do you want to throw me out of the Council after all I have done?"
Hiruzen replied, "It's the cost you have to pay for keeping the Laboratories and 10 Root ninjas. If you want, you can keep your vote on the Council, but you won't have any more rights than what Homura and Koharu have. Choose what you want."
Danzo immediately said, "I am not looking over the labs for myself. It's for the benefit of the village. Hiruzen, if the experiments in the labs get leaked out, then it won't just be my reputation that will be ruined. You won't be able to keep your seat as the Hokage either."
Hiruzen nodded and said, "That's true. Go ahead and leak the information if you want. I'll just give up on the Hokage seat and appoint the Fifth Hokage."
Danzo was surprised by how calmly Hiruzen had responded. He understood that while Hiruzen would lose the Hokage seat, he would also lose everything he had. In the future, it would be impossible for him to have any influence whatsoever in Konoha! While Hiruzen might be alright with not being the Hokage, he wasn't fine with losing what little influence he still had.
Danzo didn't say anything. It went without saying that he didn't want mutual destruction and that he valued the labs and 10 subordinates far more than a mere vote. Seeing him silent, Hiruzen said, "I thought as much. Considering your contributions, you will be invited to important council meetings. However, you will no longer have a vote in any matter."
Seeing that he had no way of negotiating further, Danzo said, "The village will always require the Root. There will come a day when you regret this decision, Hiruzen."
He turned around and began walking out. Before he could open the door, Hiruzen said, "Danzo, the culprit has still not been found. They might still try to attack the Root. Stay on guard. If a Jinchuriki is involved, then the attack might not be restricted to just Lightning. They can supercharge any jutsu with their massive chakra. As for the ninjas who spied on Fujin, I'll question them in some time. We will have a council meeting at 9 today. Come see me before then."
Danzo turned around and looked at Hiruzen once, before leaving his office without speaking a word. On this day, Danzo had lost a lot. And unlike the Uchiha incident, he didn't think that he had committed any fault. Things just spiral out of control somehow. He was in no mood to discuss anything else with Hiruzen.
As he left the office, his expression became very ugly. He thought, 'Such a terrible day. Of course, I'll be prepared for an attack. Those bastards! I hope they attack once again. This time, I'll catch and kill them myself even if I have to sacrifice a few eyes! I haven't even done anything recently to attract such hatred.
Also, I need to find out what happened with Torune. Why did he attack Fujin and expose his skills? As long as he hadn't used his ability, I could have said that Fujin was making things up. But by mentioning that ability, Fujin made his words sound too convincing.'
As he thought of Fujin, Danzo's mood worsened. He thought, 'The odd feeling I am getting about this boy has gotten even worse. I never expected him to do something like this. He gave the clans an opportunity that they had been looking for decades! Unfortunately, Hiruzen completely trusts him. I can't do anything to him in the near future. Otherwise, Hiruzen might truly carry out his threat.'
With nothing else to do, Danzo left to see what was left of his base. He would be spending a considerable amount of time adding more seals to the Root Laboratories to ensure that they could withstand a destructive jutsu if the Root was attacked once again.
Back in the Hokage's office, Hiruzen let out a sigh. Unlike all the times he acted, he truly was tired. The Root was attacked twice in two days inside Konoha and they still hadn't found any culprit. On the other hand, Danzo was returning back to acting however he wanted. Both incidents gave headaches to Hiruzen.
He thought, 'Danzo, I truly hope you don't do anything outrageous once again. I would hate having to kill you myself. Sigh, age hasn't been kind to me. I can't continue as a Hokage for long in this way. I can no longer take decisions as ruthlessly as I once did.'