Power cables represent an increasingly important asset in urban transmission and distribution networks. The increasing use of power cables brings technical challenges to the power system operators and maintenance engineers. One of these challenges is early detection of cable faults before they turn into failures. During the service life of power cables, they are vulnerable to various stresses which can turn any cable faults or defects into failures through different mechanisms. However, in the process leading to failure, condition monitoring techniques such as partial discharge (PD), distributed temperature and sheath current in the power cables can be applied to detect the existence of faults. This thesis focuses on, and makes contribution to the field of research, the modelling and analysis of sheath current under normal and abnormal operating conditions, and develops a set of criteria for use in the sheath current monitoring system. Numerical models have been developed to calculate the sheath currents in a cross-bonded cable system. Among these models, the one which contains both the inductive and capacitive components of sheath current, is presented in detail and then taken as the basis of the numerical model to be applied in the current research. Through an iterative process proposed in this thesis, the inductive component of the sheath circulating current is determined with consideration of the effect of sheath current itself due to self-coupling. Based on the presented model, sheath currents in a practical cross-bonded cable sheath using co-axial cable to connect sheaths and link box are simulated · in an example cable tunnel located in Wuhan, China. The effects of influencing factors such as self-coupling effect, capacitive current and power factors on sheath currents are, for the first time, analysed in details.