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Cancers arise through a process of somatic evolution that can result in substantial sub-clonal heterogeneity within tumours. The mechanisms responsible for the coexistence of distinct sub-clones and the biological consequences of this coexistence remain poorly understood. Here we used a mouse xenograft model to investigate the impact of sub-clonal heterogeneity on tumour phenotypes and the competitive expansion of individual clones. We found that tumour growth can be driven by a minor cell subpopulation, which enhances the proliferation of all cells within a tumour by overcoming environmental constraints and yet can be outcompeted by faster proliferating competitors, resulting in tumour collapse. We developed a mathematical modelling framework to identify the rules underlying the generation of intra-tumour clonal heterogeneity. We found that non-cell-autonomous driving of tumour growth, together with clonal interference, stabilizes sub-clonal heterogeneity, thereby enabling inter-clonal interactions that can lead to new phenotypic traits.