This paper describes an analysis of the geographical variation of childhood leukaemia incidence in Great Britain over a 15 year period in relation to natural radiation (gamma and radon). Data at the level of the 459 district level local authorities in England, Wales and regional districts in Scotland are analysed in two complementary ways: first, by Poisson regressions with the inclusion of environmental covariates and a smooth spatial structure; secondly, by a hierarchical Bayesian model in which extra-Poisson variability is modelled explicitly in terms of spatial and non-spatial components. From this analysis, we deduce a strong indication that a main part of the variability is accounted for by a local neighbourhood 'clustering' structure. This structure is furthermore relatively stable over the 15 year period for the lymphocytic leukaemias which make up the majority of observed cases. We found no evidence of a positive association of childhood leukaemia incidence with outdoor or indoor gamma radiation levels. There is no consistent evidence of any association with radon levels. Indeed, in the Poisson regressions, a significant positive association was only observed for one 5-year period, a result which is not compatible with a stable environmental effect. Moreover, this positive association became clearly non-significant when over-dispersion relative to the Poisson distribution was taken into account.