The theory and practice of formative assessment seems to be at a crossroads, even an impasse. Different theoretical justifications for the development of formative assessment, and different empirical exemplifications, have been apparent for many years. Yet practice, while quite widespread, is often limited in terms of its scope and its utilisation of the full range of possible approaches associated with formative assessment. The paper reviews these issues and explores them in relation to the development of formative assessment in higher education. HE is taken as "test case" of the paradoxical implementation of formative assessment, whereby the aim is, ostensibly, to develop independent and critical learners, while in practice highly conformative assessment procedures are being designed and developed. The paper argues that developers also need to attend to the divergent possibilities inherent in formative assessment, if their aspirations for a more transformative practice are to be realised.