The two state molecular orbital (2-MO) model of the phenyl based semiconductors is used to calculate the low-lying spectra of the A + g and B − 1u states of poly(para-phenylene) (PPP). The model parameters are determined by fitting its predictions to exact Pariser-Parr-Pople model calculations of benzene and biphenyl, and it is solved using the density matrix renormalisation group method. It is shown that there exists a band of 1 B − 1u ('s'-wave) excitons below the band states. In the long chain limit the lowest exciton is situated 3.3 eV above the ground state, consistent with experimental data. The calculated particle-hole separation of these excitons indicates that they are tightly bound, extending over only a few repeat units. The lowest band PACS numbers: 42.70Jk, 71.20Rv, 78.66Qn, 71.35Cc Since the first light-emitting device based on poly(para-phenylenevinylene) (PPV) was reported [1], the non-linear optical (NLO) properties of conjugated polymers have been extensively investigated. Amongst the numerous systems studied, poly(para-phenylene) (PPP), being a linear chain of phenyl rings, possesses one of the simplest structures. However, its electronic structure and the nature of the blue light emission [2] are still controversial. First-principles local-density approximation studies by Ambrosch-Draxl et al. [3] suggest that the optical properties of PPP can be explained by a purely band picture, with intragap non-linear excitations suppressed by three-dimensional effects. However, recent experimental results on the electroabsorption (EA) and photoinduced absorption (PA) in substituted PPP by Lane et al. [4] are explained by the presence of non-linear excitations, such as singlet and triplet excitons, and charged polarons.The aim of this paper is to clarify the rôle and importance of the low-lying non-linear excitations in PPP by calculating its electronic structure and NLO properties in a realistic Hamiltonian. The EA spectrum compares favourably with recent experiments. We identify the key states which participate in the NLO processes. Moreover, by calculating the particle-hole separation of these states, we identify the band gap as the threshold state whose particle-hole separation increases linearly with oligomer size. This enables a rigorous determination of the band gap to be made.Recently, a two state molecular orbital model was introduced [5] to describe the B 1u and A g states of the phenyl based semiconductors. In the current paper we introduce a more thorough parameterisation of this model by fitting to improved exact Pariser-Parr-Pople model calculations of the molecular building blocks (i.e. benzene and biphenyl) [7]. This model is then solved for oligomers of arbitrary length without further parameterisation. As well as our earlier work, which was the first to use the DMRG method for the phenyl based semiconductors [5, 6], there have been a number of other theoretical calculations on PPP. Brédas has used the VEH pseudopotential technique [8], Champagne et al. have performed Hartree-Fock calcula...