Partnership and participation are terms at the centre of current urban regeneration policy initiatives in the UK. The modernising local government agenda has seen a significant shift towards placing greater emphasis on the role of partnerships, and voluntary and community organisations (VCOs) (often referred to collectively as the third sector) are recognised as a key partner in this process. This research conceptualises the third sector within local governance by examining partnership working as a form of community governance. This involves exposing the power relations that underpin such a form of governance in the context of recent urban regeneration initiatives. The research examines two case studies of on-going exercises in community participation within Local Strategic Partnerships in London, the Haringey Community Empowerment Network and the Enfield Community Empowerment Network, in order to interpret how attempts to incorporate the VCO sector in urban regeneration policy in these two areas has unfolded. Through analysis of the policy implementation process as seen in the experience and judgements of key VCO actors involved, what is discovered is that VCOs are embedded in the process and exercise influence, but this influence is "selective" and "focussed", exerted at different levels in the structures and impacted upon by the capacities of VCOs. Findings also demonstrate that not all VCOs wish to be actively engaged in the same way and that new roles in service delivery for VCOs create operational difficulties for the sector. Local conditions relating to socioeconomic factors and local political subcultures play an important role in determining outcomes, which are in fact highly differentiated in the two adjacent areas. Local political conditions are seen to relate to ongoing "discourses" of local governance in terms of "agonistic" and "good bureaucracy" debates as well as theories of power