A long‐term implant experiment with four clones of Festuca rubra was performed to identify fine‐scale spatial variation in a competitive environment within a grassland sward of natural composition and density variation. Total above‐ground biomass and shoot counts of all species were recorded in 10×10 cm neighbourhoods of each implant, and their effect on the growth response of the implant was tested. Two types of response were recorded: (1) shoot sizes and vertical shoot growth dynamics, and (2) horizontal space encroachment by means of new shoot natality, mortality and their mode of formation (intravaginal or extravaginal). The vertical growth of individual shoots showed the strongest response to neighbourhood composition; it responded to the overall aboveground biomass of the neighbours, but not to their species composition. The responses in parameters of horizontal growth of individuals (natality, mortality, proportion of extravaginal shoots) were much weaker and not consistent over the observation period; however, both total biomass of the neighbours and species composition affected the response of the target plants. The overall response was rather weak in spite of a tenfold variation in neighbouring density and a thirtyfold variation in neighbouring biomass. This indicates that the response to this variation is rather flat under field conditions, either due to high overall values of density or due to interactions with below‐ground processes. Consequently, though the plant is capable of remarkable plastic responses in both vertical growth and morphogenetic change, under field conditions this capacity for plastic response is expressed only to a limited degree.