Most power relationships between organizations and stakeholders are episodic circuits of power whereby resource dependence is exacerbated by prohibitive rules. Such relationships are usually constraining rather than empowering and generate resistance and reluctant compliance rather than co-operation and creativity. Clegg’s (1989) concept of facilitative circuits of power, however, suggests that some power relationships, particular where high amounts of discretion are delegated, can result in innovation by stakeholders. Public sector agencies have multiple and diverse external stakeholder groups that they need to influence in order to implement their strategies. In this paper, we explore a facilitative circuit of power using a case study of a public sector research funding organization that employed strategic ambiguity to delegate considerable authority to stakeholders, stimulating a variety of creative responses during a period of major system restructuring. Risks associated with such a practice include the generation of active and passive resistance as well as a propensity for the system to revert to an episodic power circuit over time. Despite these risks, we propose that the deployment of strategic ambiguity is a previously unrecognized mode of high discretionary strategic agency in authority delegation that can generate creative responses on the part of stakeholders within a facilitative circuit of power.