Even though BATMAN & ROBIN flopped, Warner wanted to salvage the franchise. Young scriptwriters Lee Shapiro and Stephen Wise found out about it and presented their own pitch, BATMAN: DARKNIGHT, which was still tentatively written for Clooney and O'Donnell.
In the script, Bruce Wayne has hanged up the cape and cowl because criminals no longer fear him. Meanwhile, at Gotham University, Dick Grayson clashes with Jonathan Crane, who is using students as unwitting test subjects for his fear toxin. Crane ends up having Grayson institutionalized at Arkham Asylum and turns his colleague Kirk Langstrom into the monstrous Man-Bat. Batman ends up being framed for a series of murders Man-Bat has committed on Crane's behalf, and Batman returns to action to rescue Grayson, cure Langstrom and prevent Crane from destroying the city by engineering a mass breakout at Arkham. After getting his face badly scarred in an explosion, Crane crudely stitches himself up and begins calling himself "Scarecrow".
Shapiro and Wise got a little carried away, mapping out sequels with Harley Quinn and a Killer Croc/Clayface team-up and Dick Grayson becoming Nightwing, but despite the good will, the duo's dark and gritty script, which veered on an R rating and had Robin as the focal character for most of the first two acts, was not strong enough for Warner, who decided the best course of action was pulling the plug on the Batman franchise as it was and starting again from the ground up.