This paper explores the ambivalent nature of community organisation as a response to a ‘crisis of authority’ in post-industrial areas subject to urban regeneration. In the discourse of the Third Way, activism has been increasingly discursively framed as ‘participation’, legitimising a shift in welfare provision from the state onto civil society and a proliferation of private actors. As part of the process, existing local solidarities based on long-term shared interests and histories of conflict with the parts of the state, have been transformed (in theory) into social networks, forms of short-term instrumental co-operation based on consensus. Community activists are brought into contact with what Rose (after Foucault) describes as the ‘technologies’ of power which are deployed to produce governable subjects, co-opting and dividing them from their base communities. However, local participation also provides our most immediate experience of political economy, what Gramsci identifies as a sometimes fierce sense of difference, and the practical, historically acquired local knowledge, or ‘good sense’ which can form the basis of a challenge to hegemonic thinking. Engaging empirically with local organisers in the East Midlands, I conclude that the potential of this as a source of contestation depends on two dimensions of practice: (1) the development by activists of a critical understanding of how to foster or maintain long-term collective interests, identity and practices within their communities and (2) maintaining a clear sense of separation from the state which allows power to be confronted.