The European strategy envisages at least one major plasma device between the present generation machines such as JET and the Fusion Demonstration Reactor (DEMO). The European Community has decided to start the definition of this device, designated NET (Next European Torus), to be the focal point and to provide guidance for the current fusion effort particularly the technology programme. NET aims to produce a plasma with reactor-like parameters (i.e. full ignition, extended burn pulse and adequate power density) and with machine parameters and configuration which could be safely extrapolated to DEMO. As far as possible, NET will adopt reactor relevant technologies and be capable of performing engineering testing for the development of the DEMO blanket/first wall. The essential objectives of the programme can be achieved after three quarters of a full power year but provisions are made for continuing the operation up to almost three full power years. A reference parameter set is now being defined together with the main options for the configuration and the principal components. Present uncertainties in the physics data base are leading us to choose a set of parameters which offer considerable safety margins in the physics but, the configuration is being simultaneously optimized for maximum compactness. The degree of extrapolation in scale, performance and operating conditions from NET to DEMO appears to be acceptable. However, the DEMO should operate as a Component Test Reactor to complete the development of nuclear components capable of withstanding high neutron fluence. The definition of the reference parameter set will be followed by the predesign of NET and an associated Technology Programme oriented towards the needs of the device will be implemented; in 1988 the data base on physics and technology should be sufficient to enter into the detailed design leading to a decision on construction in 1992.