Periodical performance evaluation and adaptive resource assignment, already proposed as performance‐oriented management, seems to be the most suitable strategy for network planning under demand uncertainty. In this paper, we exploit the inherent capability of ATM networks to rearrange dynamically the already installed resources, and propose performance‐oriented management combined with virtual path bandwidth (VPB) control for the planning of the extensions of bandwidth capacities of virtual paths (VPs) and transmission links of the network. We define a large network optimization problem and solve it by a rigorous, analytical procedure. The optimization model comprises specific requirements of the network‐planning problem and a bandwidth distribution scheme ensuring network reliability. We reveal the efficiency of the proposed scheme by applying it on a model network, considering two realistic case‐studies of network‐traffic evolution. We show that in the presence of VPB control: (a) the initial distribution of the total bandwidth to VPs is of no importance, since it can be adaptively rearranged according to the offered traffic, (b) the network is well used and bandwidth investment could be saved, and (c) whenever additional bandwidth must be installed in VPs which have an unanticipated bad grade‐of‐service, time savings result. We present the network performance in detail, in figures, and compare this with the performance of the network in the absence of VPB control.