  We analyze an optical parametric oscillator (OPO) in which cascaded
down-conversion occurs inside a cavity resonant for all modes but the initial
pump. Due to the resonant cascade design, the OPO present two \chi^2 level
oscillation thresholds that are therefore remarkably lower than for a \chi^3
OPO. This is promising for reaching the regime of an effective third-order
nonlinearity well above both thresholds. Such a \chi^2 cascaded device also has
potential applications in frequency conversion to far infra-red regimes. But,
most importantly, it can generate novel multi-partite quantum correlations in
the output radiation, which represent a step beyond squeezed or entangled
light. The output can be highly non-Gaussian, and therefore not describable by
any semi-classical model.
