In the wake of debate on the 'New Policy Agenda' of good governance and the increasing prominence of Non-Government Organisations (NGOs) in public service delivery, serious questions are being asked about the role of NGOs in development, their accountability, their relationships with donors, with the state and with their beneficiaries. As southern NGOs receive increasing amounts of funding from donors and northern NGOs, their profile is being raised, prompting government response. The nature of legislative responses of governments to increasingly high profile NGO communities range from open hostility and suspicion, to indifference. National legislative frameworks are neglected in the literature, yet they may profoundly influence the accountability, legitimacy, organisation and vision of local NGOs as well as the way northern NGOs can operate in a country. The article illustrates the potential for conflict over legislation on NGOs but also important opportunities and benefits, maintaining that legislation is necessary, because it can act as a catalyst to spark and focus debate on the role of NGOs, the extent to which they legitimately represent civil society, to whom they are accountable and how they can be protected. Open, balanced negotiation between stakeholders is necessary to avoid conflict and focus discourse on NGO and government roles and accountability. Governments, donors and NGOs each have a role to play in shaping NGO legitimacy, ensuring their upwards and downwards accountability. © 2005 Taylor & Francis Group Ltd.