In this study, the authors study a fibre-optic local area network deploying optical code division multiple access technique with differential M-ary pulse position modulation (DPPM). The authors present the performance analysis of DPPM signalling using a double optical hardlimiter receiver structure considering the impairment caused by interference of other users. The analysis assumes a set of bit asynchronous transmitters employing generalised optical orthogonal codes for their DPPM signalling (GOOC-DPPM). Using mathematical analysis and simulations, the authors have demonstrated that GOOC-DPPM improves both frame error probability and the maximum achievable network throughput compared with M-ary PPM modulation scheme. It is also indicated that using generalised OOC codes instead of strict OOC codes in DPPM modulation can increase the number of users who can simultaneously transmit data in the network. The authors have analysed the stability of GOOC-DPPM in a multi-user system and demonstrated its stability. Moreover, the performance of the proposed scheme is evaluated when its important design parameters such as code length, code weight and multiplicity index of the modulation are changed. The findings led the authors to provide some guidelines for proper selection of these parameters to be used for efficient system design.