The water-cooled lithium–lead (WCLL) blanket is based on reduced-activation ferritic–martensitic steel as the structural material, the liquid alloy Pb–17Li as breeder and neutron multiplier, and water at typical PWR conditions as coolant. It was developed for DEMO specifications and shall be tested in ITER. In 1999, a reactor parameter optimization was performed in the EU which yielded improved specifications of what could be an attractive fusion power plant. Compared to DEMO, such a power reactor would be different in lay-out, size and performance, thus requiring to better exploit the potential of the WCLL blanket concept in conjunction with a water-cooled divertor. Several new approaches are currently under evaluation. This paper outlines several specific modifications, it highlights progress made on various issues and outlines the R&D work which is still required to define an improved reference design for the WCLL concept.