Partnerships between schools and universities have been well developed as a means of organisations in initial teacher education (ITE) in the UK since 1994. They have, more recently, become increasingly central to the organisations of the post-compulsory education of teachers. The focus of this article is upon the development of a new partnership between an urban university and local schools, for the post-compulsory education of teachers at Masters level. We shall consider the contradictions and tensions between the neo-liberal competitive context in which we work, and the collaborative and participatory practices of partnership. We contend that democratic partnerships are necessary to the development of schools as democratic institutions, and that democracy as an educative way of life is the most effective way in which inequalities of pupil achievement and opportunity can be addressed--in particular, the inequalities exposed through the wide gap in England between the educational achievement of rich and poor. We shall draw upon data from an evaluation of a new Masters Education programme to illustrate the extent to which democratic partnerships can be established and maintained in a neo-liberal context.