A co-ordinated control scheme for STATCOM and generator excitation to achieve transient stability, damping and voltage regulation enhancement of power systems is presented. First, the nonlinear model of STATCOM installed in a power system is derived. Then, using the feedback linearisation technique, the nonlinearities of the generator and the STATCOM model are alleviated. With the help of robust control theory, the variation of system structure, the parameter uncertainties and the interconnection between the generator and STATCOM are taken into consideration in the controller design. Only local measurements are required. The performance of the proposed control scheme is evaluated through a real time test by means of the real time digital simulator (RTDS). The results present comparisons of the system performance with different controllers, over a wide range of operating conditions. It is shown that the proposed co-ordinated control can provide better stability, voltage control and damping than other schemes.