The non-linear fluid dynamics of a warped accretion disc was investigated i
n an earlier paper by developing a theory of fully non-linear bending waves
in a thin, viscous disc. That analysis is extended here to take proper acc
ount of thermal and radiative effects by solving an energy equation that in
cludes viscous dissipation and radiative transport. The problem is reduced
to simple one-dimensional evolutionary equations for mass and angular momen
tum, expressed in physical units and suitable for direct application. This
result constitutes a logical generalization of the alpha theory of Shakura
& Sunyaev to the case of a time-dependent warped accretion disc. The local
thermal-viscous stability of such a disc is also investigated.