Existing live video streaming systems can be classified as server (cloud) based or as peer-to-peer (P2P). The client–server approach promises stability and (Quality of Service) QoS by incurring expensive bandwidth provision cost on the server. On the other hand, P2P architecture is scalable with low bandwidth and maintenance cost. Here we propose a cloud assisted P2P live streaming architecture which is scalable and stable. In order to achieve this we have developed: (i) a scalable gossip protocol that monitors dynamically the total available bandwidth resources of the participating peers, (ii) a control strategy that dynamically allocates the bandwidth that is required.The first step towards this direction is to create a theoretical model that captures the dynamic relationship between the total bandwidth surplus/deficit and peers’ bandwidth utilization in order to be able to apply a control theoretical approach. Moreover, we quantify the impact of monitoring inaccuracies and peers’ dynamic bandwidth changes and we calculate analytically, as a function of them, the minimum amount of bandwidth overprovision that ensures the undisturbed distribution of the stream. System is evaluated through a detailed simulator of a complete P2P live streaming system and testified the uninterrupted and complete stream delivery even in very adverse bandwidth changes.