Layered LiMn0.4Ni0.4Co0.2O2 with the α-NaFeO2 structure was synthesized by the “mixed hydroxide” method, followed by a high temperature calcination at 800°C giving a single phase material of surface area 5m2 g−1. A combined X-ray/neutron diffraction Rietveld refinement showed that the transition metals in the 3b layer are randomly distributed at room temperature, and that only nickel migrates to the lithium layer and in this case 4.4%. Addition of excess lithium reduces the amount of nickel on the lithium sites. The magnetic susceptibilities of the compounds LiMn y Ni y Co1−2y O2 (y =0.5, 0.4, 0.333) follow the Curie–Weiss law above 100K and are consistent with the presence of Ni2+, Mn4+ and Co3+ cations; their magnetization curves, measured at 5K and showing a pronounced hysteresis, are also consistent with the nickel content on the lithium sites increasing with decreasing cobalt content. This material shows a stable capacity of 140–170mAhg−1 for more than 90 cycles within the voltage window of 2.5–4.4V. The layered rhombohedral structure is maintained as lithium is removed down to at least a lithium content of 0.05; the total volume change on cycling is under 2%. The nickel ions pin the lattice so that MO2 slab sliding to form the 1T structure cannot readily occur. The capability of aqueous acids to leach lithium from the lattice decreases with increasing nickel content in the lithium layer; however, the thermal stability of the delithiated compounds increases with cobalt content.