This article introduces a novel distributed controller approach for networked control systems (NCS) to achieve finite gain L-2 stability independent of constant time delay. The proposed approach represents a generalization of the well-known scattering transformation which applies for passive systems only. The main results of this article are (a) a sufficient stability condition for general multi-in put-multi-output (MIMO) input-feedforward-output-feedback-passive (IF-OFP) nonlinear systems and (b) a necessary and sufficient stability condition for linear time-invariant (LTI) single-input-single-output (SISO) systems. The performance advantages of the proposed approach are reduced sensitivity to time delay and improved steady state error compared to alternative known delay-independent small gain type approaches. Simulations validate the proposed approach. (C) 2009 Elsevier Ltd. All rights reserved.