Nationalists didn't believe the government. The felt they were trying to develop the Protestant heartland and neglecting the west where Catholics were in the majority. The implementation of the report emphasises O'Neill's contributions to affairs in Northern Ireland. Even though it would have made sense to develop a city where Catholics were in majority so that tension would decrease even further, O'Neill decided to develop the east even more which created jealousy and contempt from the Nationalists towards Unionists. Either O'Neill had no idea what he was doing or he knew and just didn't care.
After the Colraine University Controversy O'Neill faced challenges from both sides. Nationalists hoped that O'Neill would support their claims for greater equality but they grew restless with the lack of real change but the extreme Unionists resented any gesture O'Neill made towards the Nationalists. Throughout Northern Ireland, new parties were beginning to form with different objectives then the older generation. In 1967 the Northern Ireland Civil Rights Association was formed. It consisted of moderate Nationalists like John Hume. They wanted full civil rights and an end to discrimination against Catholics and Nationalists. There were some moderate Unionists who believed the only way of achieving peace was with justice for all citizens. Their demands were an end to the Special Powers Act and the B Specials. Also, all council houses to be given on a point system, and 'one man, one vote', to be brought in. The foundation of this group was the beginning of O'Neill's fall.
Their demands were moderate but they were too much for the Unionists. This led to the clash in Derry in October, 1963. This march was organised by NICRA. It was prohibited from going inside Derry walls due to Unionist protest. They marched through Derry anyway and the police used brute force against the marchers; the beating was televised and footage was being shown in Britain.