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Consolidation and Danegeld

As Danish King of England, Cnut was quick to eliminate any prospective challenge from the survivors of the mighty Wessex dynasty. The first year of his reign was marked by the executions of a number of English noblemen whom he considered suspect. Æthelred 's son Eadwig Ætheling fled from England but was killed on Cnut's orders. Edmund Ironside's sons likewise fled abroad. Æthelred's sons by Emma of Normandy went under the protection of their relatives in the Duchy of Normandy.

In July 1017, Cnut wed Queen Emma, the widow of Æthelred and daughter of Richard I, Duke of Normandy. In 1018, having collected a Danegeld amounting to the colossal sum of £72,000 levied nationwide, with an additional £10,500 extracted from London, Cnut paid off his army and sent most of them home. He retained 40 ships and their crews as a standing force in England. An annual tax called heregeld (army payment) was collected through the same system Æthelred had instituted in 1012 to reward Scandinavians in his service.

Cnut built on the existing English trend for multiple shires to be grouped together under a single ealdorman, thus dividing the country into four large administrative units whose geographical extent was based on the largest and most durable of the separate kingdoms that had preceded the unification of England. The officials responsible for these provinces were designated earls, a title of Scandinavian origin already in localised use in England, which now everywhere replaced that of ealdorman. Wessex was initially kept under Cnut's personal control, while Northumbria went to Erik of Hlathir, East Anglia to Thorkell the Tall, and Mercia remained in the hands of Eadric Streona.

This initial distribution of power was short-lived. The chronically treacherous Eadric was executed within a year of Cnut's accession. Mercia passed to one of the leading families of the region, probably first to Leofwine, ealdorman of the Hwicce under Æthelred, but certainly soon to his son Leofric. In 1021, Thorkel also fell from favour and was outlawed.

Following his death in the 1020s, Erik of Hlathir was succeeded as Earl of Northumbria by Siward, whose grandmother, Estrid (married to Úlfr Thorgilsson), was Cnut's sister. Bernicia, the northern part of Northumbria, was theoretically part of Erik and Siward's earldom, but throughout Cnut's reign it effectively remained under the control of the English dynasty based at Bamburgh, which had dominated the area at least since the early 10th century. They served as junior Earls of Bernicia under the titular authority of the Earl of Northumbria. By the 1030s Cnut's direct administration of Wessex had come to an end, with the establishment of an earldom under Godwin, an Englishman from a powerful Sussex family. In general, after initial reliance on his Scandinavian followers in the first years of his reign, Cnut allowed those Anglo-Saxon families of the existing English nobility who had earned his trust to assume rulership of his Earldoms.