The lack of management has led to the degrading quality of public space in modern cities around the globe. Contemporary public spaces are facing challenges in terms of maintaining them as a “social space” so that they are accessible and functional for the users. Using Kathmandu as a case study, this paper explores the challenges the contemporary public spaces within urban neighbourhoods are facing in their management. The study reveals that the regulation of use is a major concern of public space management in the new neighbourhoods of Kathmandu as evident in the limited accessibility and utility of public space, due to control and commercialisation. The use of public space has also been affected by the lack of regular maintenance. The root cause of these problems lies in weak urban governance at the neighbourhood level, which has led the local community-based organisations to take a role in neighbourhood management. These findings confirm that the management of public space is a critical issue of urban development with commonalities existing across geographical regions that demand adequate consideration from the stakeholders.