December 1977, Gill and Balfe, influenced by Kraftwerk, formed
, which came about as a result of a compromise between two of the members: Balfe wanted to call the band
and Gill wanted to call the band Darling, I Love You. Other founding members were Dave Hughes (keyboards) and Chris Teepee (rhythm unit and tapes).
In 1978, Balfe left the group to manage other bands, and to eventually join Big in Japan and later The Teardrop Explodes. In August 1978, the band were joined by poets Gordon Hon and Max the Actor, Martin Cooper (on sax), Andy McCluskey (on lead vocals and bass), who was previously in The Id, and Ken Peers. In September, McCluskey quit to rejoin his former Id bandmate, Paul Humphreys, to form Orchestral Manoeuvres in the Dark, and by October 1978 only Gill and Hughes remained in the band. As a duo, they signed to Inevitable Records. A demo of "Freedom Fighters" attracted the interest of Phonogram, who then signed them.[1]
However, Phonogram shortened the name of the band to
, for the releases.