On September 19, 1954, The National Liberation Movement was formed.

The start of Nkrumah's first term as "leader of government business" was marked by cordiality and co-operation with the British governor. During the next few years, the government was gradually transformed into a full parliamentary system. The changes were opposed by the more traditionalist African elements, particularly in Asante and the Northern Territories. This opposition, however, proved ineffective in the face of continuing and growing popular support for a single over-riding concept—independence at an early date.

In 1952 the position of prime minister was created and the Executive Council became the cabinet. The prime minister was made responsible to the assembly, which duly elected Nkrumah prime minister. The constitution of 1954 ended the election of assembly members by the tribal councils. The Legislative Assembly increased in size, and all members were chosen by direct election from equal, single-member constituencies. Only defence and foreign policy remained in the hands of the governor; the elected assembly was given control of virtually all internal affairs of the colony.

The CPP pursued a policy of political centralisation, which encountered serious opposition. Shortly after the 1954 election, a new party, the Asante-based National Liberation Movement (NLM), was formed. The NLM advocated a federal form of government, with increased powers for the various regions. NLM leaders criticised the CPP for perceived dictatorial tendencies. The new party worked in co-operation with another regionalist group, the Northern People's Party. When these two regional parties walked out of discussions on a new constitution, the CPP feared that London might consider such disunity an indication that the colony was not yet ready for the next phase of self-government.

The National Liberation Movement was a Ghanaian political party formed on September 19, 1954. It was set up by disaffected Ashanti members of the Convention People's Party, who were joined by Kofi Abrefa Busia, the NLM opposed the process of centralization whilst supporting a continuing role for traditional leaders. Its main founding member was linguist Baffour Akoto whilst J. B. Danquah served as leader. The party gained some support in the Gold Coast legislative election, 1956 and became the third largest party in the Assembly with 12 seats, behind the Convention People's Party and the Northern People's Party.

The Avoidance of Discrimination Act, passed by Kwame Nkrumah in 1957 outlawed parties based on racial, regional, or religious differences and as such the NLM became part of the newly formed opposition group the United Party

The British constitutional adviser, however, backed the CPP position on a non-federalist constitution. The governor dissolved the assembly to test popular support for the CPP demand for immediate independence. The Crown agreed to grant independence if so requested by a two-thirds majority of the new legislature. New elections were held in July 1956. In keenly contested elections, the CPP won 57 percent of the votes cast, but the fragmentation of the opposition gave the CPP every seat in the south as well as enough seats in Asante, the Northern Territories, and the Trans-Volta Region to hold a two-thirds majority of the 104 seats.