In his later years with Quo, Lancaster's relationship with the others became increasingly strained, partly due to musical differences with Francis Rossi and practical problems caused by Lancaster's relocation to Australia. He was replaced by a bass-playing dummy in the Rockin' All Over The World promotional video when he refused to return to the UK to film it, and was absent for most of the promotional activities for the Marguerita Time single, claiming the song was embarrassing. His place was taken by Slade's Jim Lea on Top Of The Pops in December 1983, but the band also made several appearances around this time without a bass player at all.
Status Quo announced in 1984 that they intended to stop touring, and after a farewell tour, Lancaster's final performance with Quo was when they briefly reunited to open Live Aid in 1985. However, when Francis Rossi got the band back together with Rick Parfitt the following year, Lancaster was replaced by John 'Rhino' Edwards, who had worked on an unreleased solo album of Parfitt's and remains Quo's bassist to this day.
Lancaster took Rossi and Parfitt to court over the use of the Quo name, but lost the case and the new line-up went ahead. Lancaster is said to be very bitter about how he was kicked out of the band. John Harris, in The Guardian, claimed in 2005: "He was, by some distance, the most bitter musician I have ever encountered". Lancaster says he is still angry as he feels "stabbed in the back" as his livelihood has been taken away from him.
Lancaster continues to live in Sydney, Australia. He has been a member of Australian bands "The Party Boys" and "The Bombers" who achieved moderate success within Australia. The Bombers' original drummer was Lancaster's ex-Status Quo band mate John Coghlan, but, ironically, Lancaster had been complicit in engineering Coghlan's departure from the band four years prior to his own. The Bombers supported Cheap Trick (1988), Alice Cooper (1990) and Skid Row (1990) on their tours of Australia. For a time in the mid-90's, Lancaster was a member of the Angry Anderson Band.