  We report the discovery of low-mass PMS stars in the younger subgroup of the
Cepheus OB3 association, Cep OB3b, using {\it UBVI} CCD photometry and
spectroscopy. The location of a PMS is well defined in a V versus (V-I)
colour-magnitude diagram (CMD). Multi-fibre spectroscopy results of
optically-selected PMS candidates confirm the T Tauri nature of 10 objects,
with equal numbers of classical and weak-line TTS. There are 6 other objects
which we classify as possible PMS stars. The newly discovered TTS have masses
in the range 0.9 - 3.0 Msun and ages from <1 to nearly 10 Myr, based on the
Siess et al.(2000) isochrones. Their location close to the O and B Their
location close to the O and B stars of the association demonstrates that
low-mass star formation is possible in this hostile environment dominated by
early-type stars and that the latter must have been less effective in eroding
the circumstellar discs of their lower mass siblings compared to other OB
associations (e.g. lambda Ori). We attribute this to the nature of the local
environment, speculating that the bulk of molecular material, which shielded
low-mass stars from the ionising radiation of their early-type siblings, has
only recently been removed (abridged).
