On coming to power in 1997, the New Labour government promised to move beyond the 'ruthless free-for-all' of the neo-liberals. However, rather than revisiting the 'stifling statism' of 'Old Labour', the government has claimed to be developing a so-called 'third way' in which policies are put forward on the basis of 'what works' rather than being driven by any one ideological approach. Through drawing on Giddens' outline of 'first', 'second' and 'third way' politics, this paper looks at a range of New Labour's education policies and examines the extent to which they can be seen to embody a distinctively different approach. It finds that, despite some remnants of old Labour 'first way' thinking, the government's strategies have largely been an extension of second way 'neoliberalism'. Education action zones are identified as the initiative which comes closest to representing a 'third way'. The paper concludes by discussing the potential of this initiative for addressing and overcoming the failures of first and second way policies.