Despite a growing awareness of the implications of the changing nature of literacy due to the impact of technological innovations, literacy pedagogies in educational institutions across the world continue to be predicated on a performative model, in which emphasis is placed on transmitting narrow concepts of literacy that privilege the alphabetic principle. However, an examination of recent developments in England indicate that there is, increasingly, a disconcerting relationship between new literacy practices as experienced by children and young people outside of schools and the development of literacy curricula and pedagogy by policy-makers. This paper draws on Bernstein's (2000) conceptualization of the "recontextualizing field" in order to explore how national literacy policy in England is selectively appropriating aspects of new literacy practices and reformulating them in ways which dissipate their potential for innovation and transformation. Berstein's "Official Recontextualizing Field" (ORF) and "Pedagogic Recontextualizing Field" (PRF) in which these developments are taking place are analysed in order to determine how the out-of-school discourses of children and young people are being ideologically transformed as they start to inform national policy. Instead, it is suggested that account needs to be taken of the way in which children and young people are engaged in innovative literacy practices, drawing from current uses of social software on "Web 2.0" as an illustrative example. In taking account of these developments, schools can adopt "productive pedagogies" (Lingard, B., Ladwig, J., Luke, A., Mills, M., Hayes, D. & Gore, J. (2001) The Queensland school reform longitudinal study, Vols 1 and 2 (Brisbane, Education Queensland)) in order to ensure that all pupils become successful literacy learners. (Contains 2 notes and 3 figures.)