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Therefore, its known narrative elements are not a part of the Doctor Who universe. It may have been the basis for a similar story in another medium, however — and that story may indeed be a part of the DWU.
Believing the script to be too expensive for this slot, however, Russell T Davies decided that it would be held over to series 3, and require further rewrites. The script was replaced with Fear Her, a separate commission to Fry's script. Fry's script was never made as Fry could not find the time to make the necessary alterations. (DWMSE 14)
According to Fry in an interview with Bob Tyrer, the episode would revolve around the "legend of [Sir] Gawain and the Green Knight, one of the Sub-Arthurian legends."  In an interview with Scotland Today, Fry claimed that a "well-known British legend" would ultimately have had alien origins, and include a scene where the TARDIS landed on a "strange planet." (DWMSE 14)