  A detailed investigation of the theoretical ambiguities present in the QCD
description of photon production in $e^+e^-$ annihilation is given. It is
pointed out that in a well-defined perturbative analysis it is necessary to
subtract the quark-photon collinear singularities. This subtraction requires
the introduction of an unphysical parameter in the perturbative part of the
cross section. The subtracted term is factored into non-perturbative
fragmentation function. The dependence on the unphysical parameter cancels in
the sum of non-perturbative and perturbative parts. It is pointed out that for
$E_{\gamma}\le \sqrt{s}/(2(1+\epsilon_c))$ the non-perturbative contributions
are suppressed. Using a general purpose next-to-leading order Monte Carlo
program, we calculate various physical quantities that were measured in LEP
experiments recently.
