The Hound of the Borders — Peter Tonkin

The third book in the Master of Defence series, featuring Elizabethan sleuth Tom Musgrave
During rehearsals for the first-ever performance of A Midsummer Night's Dream, Tom is called away to hear the news of his brother's death. The cause? Fear John was found clinging to the high branches of an ancient oak, frozen in terror. Rumour has it that the Barguest, a mythical hound of terrifying proportions, is at large in the Borders of Scotland.