The LEADER approach has been at the heart of European rural development policy for the last 20 years, encompassing the principles of bottom‐up endogenous development and community empowerment. Initially delivered through autonomous local action groups (LAGs), since the 2007–2013 programming period, LEADER has been integrated with other measures in broader regional rural development programmes. It has been claimed that these changes have diluted the participatory principles of this programme. We examine the extent and impact of participation in rural development through LEADER, how this has changed over time, and the factors driving changes, through surveys of LAG managers in two case study regions in Spain (Andalusia) and the UK (Wales). The findings show that LAG managers are very positive about the breadth of participation in their own group and its role in decentralising decision‐making, but critical of the structure, operation and management of LEADER in rural development programmes. In particular bureaucracy and the increased influence of regional and local government are perceived to have limited the autonomy of LAGs and to have deterred the participation of marginalised groups. The principles of this initiative are perceived to have been diluted and LEADER appears to have been a victim of its own success.