diff --git a/config.yaml b/config.yaml
index f2819f9e..c9615b3d 100755
--- a/config.yaml
+++ b/config.yaml
@@ -140,7 +140,8 @@ options:
         gre
         vxlan
       .
-      Multiple types can be provided - field is space delimited.
+      Multiple types can be provided - field is space delimited. To disable
+      overlay networks set to the empty string ''
   flat-network-providers:
     type: string
     default:
@@ -617,3 +618,8 @@ options:
       http://bugs.launchpad.net/charms providing an explanation of why the
       config was needed so that we may consider it for inclusion as a
       natively supported config in the the charm.
+  default-tenant-network-type:
+    type: string
+    default:
+    description: |
+      The default type for a tenant network e.g. vxlan, vlan, gre etc
diff --git a/hooks/neutron_api_context.py b/hooks/neutron_api_context.py
index 63e5702e..dcfedc3b 100644
--- a/hooks/neutron_api_context.py
+++ b/hooks/neutron_api_context.py
@@ -12,6 +12,8 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 
+from collections import OrderedDict
+
 from charmhelpers.core.hookenv import (
     config,
     relation_ids,
@@ -31,7 +33,11 @@ from charmhelpers.contrib.openstack.utils import (
 VLAN = 'vlan'
 VXLAN = 'vxlan'
 GRE = 'gre'
+FLAT = 'flat'
+LOCAL = 'local'
 OVERLAY_NET_TYPES = [VXLAN, GRE]
+NON_OVERLAY_NET_TYPES = [VLAN, FLAT, LOCAL]
+TENANT_NET_TYPES = [VXLAN, GRE, VLAN, FLAT, LOCAL]
 
 
 def get_l2population():
@@ -39,13 +45,42 @@ def get_l2population():
     return config('l2-population') if plugin == "ovs" else False
 
 
-def get_overlay_network_type():
+def _get_overlay_network_type():
     overlay_networks = config('overlay-network-type').split()
     for overlay_net in overlay_networks:
         if overlay_net not in OVERLAY_NET_TYPES:
             raise ValueError('Unsupported overlay-network-type %s'
                              % overlay_net)
-    return ','.join(overlay_networks)
+    return overlay_networks
+
+
+def get_overlay_network_type():
+    return ','.join(_get_overlay_network_type())
+
+
+def _get_tenant_network_types():
+    default_tenant_network_type = config('default-tenant-network-type')
+    tenant_network_types = _get_overlay_network_type()
+    tenant_network_types.extend(NON_OVERLAY_NET_TYPES)
+    if default_tenant_network_type:
+        if (default_tenant_network_type in TENANT_NET_TYPES and
+                default_tenant_network_type in tenant_network_types):
+            tenant_network_types[:0] = [default_tenant_network_type]
+        else:
+            raise ValueError('Unsupported or unconfigured '
+                             'default-tenant-network-type'
+                             ' {}'.format(default_tenant_network_type))
+    # Dedupe list but preserve order
+    return list(OrderedDict.fromkeys(tenant_network_types))
+
+
+def get_tenant_network_types():
+    '''Get the configured tenant network types
+
+    @return: comma delimited string of configured tenant
+             network types.
+    '''
+    return ','.join(_get_tenant_network_types())
 
 
 def get_l3ha():
@@ -124,6 +159,10 @@ class NeutronCCContext(context.NeutronContext):
     def neutron_l2_population(self):
         return get_l2population()
 
+    @property
+    def neutron_tenant_network_types(self):
+        return get_tenant_network_types()
+
     @property
     def neutron_overlay_network_type(self):
         return get_overlay_network_type()
@@ -195,6 +234,7 @@ class NeutronCCContext(context.NeutronContext):
             ctxt['min_l3_agents_per_router'] = \
                 config('min-l3-agents-per-router')
         ctxt['dhcp_agents_per_network'] = config('dhcp-agents-per-network')
+        ctxt['tenant_network_types'] = self.neutron_tenant_network_types
         ctxt['overlay_network_type'] = self.neutron_overlay_network_type
         ctxt['external_network'] = config('neutron-external-network')
         release = os_release('neutron-server')
diff --git a/templates/icehouse/ml2_conf.ini b/templates/icehouse/ml2_conf.ini
index 1a6c3178..52cfa9df 100644
--- a/templates/icehouse/ml2_conf.ini
+++ b/templates/icehouse/ml2_conf.ini
@@ -8,8 +8,8 @@
 type_drivers = local,flat
 mechanism_drivers = calico
 {% else -%}
-type_drivers = {{ overlay_network_type }},vlan,flat,local
-tenant_network_types = {{ overlay_network_type }},vlan,flat,local
+type_drivers = {{ tenant_network_types }}
+tenant_network_types = {{ tenant_network_types }}
 mechanism_drivers = openvswitch,hyperv,l2population
 
 [ml2_type_gre]
diff --git a/templates/kilo/ml2_conf.ini b/templates/kilo/ml2_conf.ini
index 5265b950..8b06d39f 100644
--- a/templates/kilo/ml2_conf.ini
+++ b/templates/kilo/ml2_conf.ini
@@ -12,8 +12,8 @@ extension_drivers=port_security
 type_drivers = local,flat
 mechanism_drivers = calico
 {% else -%}
-type_drivers = {{ overlay_network_type }},vlan,flat,local
-tenant_network_types = {{ overlay_network_type }},vlan,flat,local
+type_drivers = {{ tenant_network_types }}
+tenant_network_types = {{ tenant_network_types }}
 {% if enable_sriov %}
 mechanism_drivers = openvswitch,l2population,sriovnicswitch
 {% elif enable_hyperv %}
diff --git a/tests/dfs-basic-trusty-icehouse b/tests/dfs-basic-trusty-icehouse
index bacb2a16..19d7f839 100755
--- a/tests/dfs-basic-trusty-icehouse
+++ b/tests/dfs-basic-trusty-icehouse
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/dfs-basic-trusty-kilo-git b/tests/dfs-basic-trusty-kilo-git
index 92bc880d..ab886f22 100755
--- a/tests/dfs-basic-trusty-kilo-git
+++ b/tests/dfs-basic-trusty-kilo-git
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-trusty-icehouse b/tests/gate-basic-trusty-icehouse
index c5623990..86b91036 100755
--- a/tests/gate-basic-trusty-icehouse
+++ b/tests/gate-basic-trusty-icehouse
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-trusty-kilo b/tests/gate-basic-trusty-kilo
index f21386ec..1985851e 100755
--- a/tests/gate-basic-trusty-kilo
+++ b/tests/gate-basic-trusty-kilo
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-trusty-liberty b/tests/gate-basic-trusty-liberty
index 5b952418..87c4b296 100755
--- a/tests/gate-basic-trusty-liberty
+++ b/tests/gate-basic-trusty-liberty
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-trusty-mitaka b/tests/gate-basic-trusty-mitaka
index 609843d0..ecc7921a 100755
--- a/tests/gate-basic-trusty-mitaka
+++ b/tests/gate-basic-trusty-mitaka
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-xenial-mitaka b/tests/gate-basic-xenial-mitaka
index 1f6ee877..2bac07bc 100755
--- a/tests/gate-basic-xenial-mitaka
+++ b/tests/gate-basic-xenial-mitaka
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-xenial-newton b/tests/gate-basic-xenial-newton
index a6be42d2..6604c823 100755
--- a/tests/gate-basic-xenial-newton
+++ b/tests/gate-basic-xenial-newton
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/tests/gate-basic-yakkety-newton b/tests/gate-basic-yakkety-newton
index 4d21401e..d51960e1 100644
--- a/tests/gate-basic-yakkety-newton
+++ b/tests/gate-basic-yakkety-newton
@@ -1,4 +1,4 @@
-#!/usr/bin/python
+#!/usr/bin/env python
 #
 # Copyright 2016 Canonical Ltd
 #
diff --git a/unit_tests/test_neutron_api_context.py b/unit_tests/test_neutron_api_context.py
index 77cdec02..035a735d 100644
--- a/unit_tests/test_neutron_api_context.py
+++ b/unit_tests/test_neutron_api_context.py
@@ -49,21 +49,64 @@ class GeneralTests(CharmTestCase):
         self.test_config.set('neutron-plugin', 'nsx')
         self.assertEquals(context.get_l2population(), False)
 
-    def test_get_overlay_network_type(self):
+    def test_get_tenant_network_types(self):
         self.test_config.set('overlay-network-type', 'gre')
-        self.assertEquals(context.get_overlay_network_type(), 'gre')
+        self.assertEquals(
+            context._get_tenant_network_types(),
+            ['gre', 'vlan', 'flat', 'local'])
 
-    def test_get_overlay_network_type_multi(self):
+    def test_get_tenant_network_types_multi(self):
         self.test_config.set('overlay-network-type', 'gre vxlan')
-        self.assertEquals(context.get_overlay_network_type(), 'gre,vxlan')
+        self.assertEquals(
+            context._get_tenant_network_types(),
+            ['gre', 'vxlan', 'vlan', 'flat', 'local'])
 
-    def test_get_overlay_network_type_unsupported(self):
+    def test_get_tenant_network_types_unsupported(self):
         self.test_config.set('overlay-network-type', 'tokenring')
         with self.assertRaises(ValueError) as _exceptctxt:
-            context.get_overlay_network_type()
+            context._get_tenant_network_types()
         self.assertEqual(_exceptctxt.exception.message,
                          'Unsupported overlay-network-type tokenring')
 
+    def test_get_tenant_network_types_default(self):
+        self.test_config.set('overlay-network-type', 'gre vxlan')
+        self.test_config.set('default-tenant-network-type', 'vxlan')
+        self.assertEquals(
+            context._get_tenant_network_types(),
+            ['vxlan', 'gre', 'vlan', 'flat', 'local'])
+
+    def test_get_tenant_network_types_default_dup(self):
+        self.test_config.set('overlay-network-type', 'gre')
+        self.test_config.set('default-tenant-network-type', 'vlan')
+        self.assertEquals(
+            context._get_tenant_network_types(),
+            ['vlan', 'gre', 'flat', 'local'])
+
+    def test_get_tenant_network_types_empty(self):
+        self.test_config.set('overlay-network-type', '')
+        self.test_config.set('default-tenant-network-type', 'vlan')
+        self.assertEquals(
+            context._get_tenant_network_types(),
+            ['vlan', 'flat', 'local'])
+
+    def test_get_tenant_network_types_unsupported_default(self):
+        self.test_config.set('overlay-network-type', '')
+        self.test_config.set('default-tenant-network-type', 'whizzy')
+        with self.assertRaises(ValueError) as _exceptctxt:
+            context._get_tenant_network_types()
+        self.assertEqual(_exceptctxt.exception.message,
+                         'Unsupported or unconfigured '
+                         'default-tenant-network-type whizzy')
+
+    def test_get_tenant_network_types_unconfigured_default(self):
+        self.test_config.set('overlay-network-type', 'gre')
+        self.test_config.set('default-tenant-network-type', 'vxlan')
+        with self.assertRaises(ValueError) as _exceptctxt:
+            context._get_tenant_network_types()
+        self.assertEqual(_exceptctxt.exception.message,
+                         'Unsupported or unconfigured '
+                         'default-tenant-network-type vxlan')
+
     def test_get_l3ha(self):
         self.test_config.set('enable-l3ha', True)
         self.test_config.set('overlay-network-type', 'gre')
@@ -252,7 +295,6 @@ class HAProxyContextTest(CharmTestCase):
         _get_netmask_for_address.return_value = '255.255.255.0'
         _kv().get.return_value = 'abcdefghijklmnopqrstuvwxyz123456'
         service_ports = {'neutron-server': [9696, 9686]}
-        self.maxDiff = None
         ctxt_data = {
             'local_host': '127.0.0.1',
             'haproxy_host': '0.0.0.0',
@@ -326,6 +368,7 @@ class NeutronCCContextTest(CharmTestCase):
             'verbose': True,
             'l2_population': True,
             'overlay_network_type': 'gre',
+            'tenant_network_types': 'gre,vlan,flat,local',
             'quota_floatingip': 50,
             'quota_health_monitors': -1,
             'quota_member': -1,
@@ -365,6 +408,7 @@ class NeutronCCContextTest(CharmTestCase):
             'verbose': True,
             'l2_population': True,
             'overlay_network_type': 'vxlan',
+            'tenant_network_types': 'vxlan,vlan,flat,local',
             'quota_floatingip': 50,
             'quota_health_monitors': -1,
             'quota_member': -1,
@@ -406,6 +450,7 @@ class NeutronCCContextTest(CharmTestCase):
             'verbose': True,
             'l2_population': False,
             'overlay_network_type': 'gre',
+            'tenant_network_types': 'gre,vlan,flat,local',
             'max_l3_agents_per_router': 2,
             'min_l3_agents_per_router': 2,
             'dhcp_agents_per_network': 3,
@@ -446,6 +491,7 @@ class NeutronCCContextTest(CharmTestCase):
             'verbose': True,
             'l2_population': True,
             'overlay_network_type': 'gre',
+            'tenant_network_types': 'gre,vlan,flat,local',
             'quota_floatingip': 50,
             'quota_health_monitors': -1,
             'quota_member': -1,