Abstract: This invention relates to the production of hydroxy-terminated polymers in the 2,000-20,000 MW range suitable for use as prepolymers in curing reactions with isocyanates to produce elastomers. The process involves the continuous addition over periods of 25-50 hours of an oxirane (monoepoxide) or a mixture of an oxirane and an oxetane to a reaction mixture, consisting of stoichiometric excesses of oxonium ion-forming catalyst such as BF.sub.3 -etherate and a diol initiator dissolved in an inert solvent. Under these conditions, chain extension of the diol occurs and the formation of cyclic oligomers and other impurities is minimised. The mole ratio of the initiator to catalyst is maintained at above 10:1 to suppress the formation of cationic terminal species on the growing polymer chain.