AbstractThe field‐boundary‐element method naturally admits the solution algorithm in the incompressible regimes of fully developed plastic flow. This is not the case with the generally popular finite‐element method, without further modifications to the method such as reduced integration or a mixed method for treating the dilatational deformation. The analyses by the field‐boundary‐element method for geometric and material non‐linear problems are generally carried out by an incremental algorithm, where the velocities (or displacement increments) on the boundary are treated as the primary variables and aninitial strain iterationmethod is commonly used to obtain the state of equilibrium. For problems such as buckling and diffused tensile necking, involving very large strains, such a solution scheme may not be able to capture the bifurcation phenomena, or the convergence will be unacceptably slow when the post‐bifurcation behaviour needs to be analysed. To avoid this predicament, a full tangent stiffness field‐boundary‐element formulation which takes the initial stress–velocity gradient (displacement gradient) coupling terms accurately into account is presented in this paper. Here, the velocity field both inside and on the boundary are treated as primary variables. The large strain plasticity constitutive equation employed is based on an endochronic model of combined isotropic/kinematic hardening plasticity using the concepts of material director triad and the associated plastic spin. A generalized mid‐point radial return algorithm is presented for determining the objective increments of stress from the computed velocity gradients. Numerical results are presented for problems of diffuse necking, involving very large strains and plastic instability, ininitially perfectelastic–plastic plates under tension. These results demonstrate the clear superiority of the full tangent stiffness algorithm over the initial strain algorithm, in the context of the integral equation formulations for