In many languages across the world, verbs reporting speech, thoughts and perceptions (also referred to as quotative verbs) grammaticalise into quote markers and/or complementisers. This paper analyses the change of the items kua and fen in the Austronesian languages Tukang Besi and Buru, as originally full lexical 'report' verbs that became open to reinterpretation as grammatical items after having undergone 'semantic bleaching'. It is proposed that the 'semantic bleaching', which crucially involves loss of argument structure, is caused by a mismatch between linguistic levels -here between surface syntax and lexical argument structure. The mismatch involves a violation of universal constraints on 'Semantic Transparency' and 'Structural Simplicity', and results in a reduced lexical representation of the report verb as a predicate without arguments. The multifunctional, polysemous character of this 'grammaticalised' item is now a consequence of its interaction with particular surface syntactic constructions. In other words, 'V to C' grammaticalisation is a structurally determined variable interpretation of a lexically impoverished item, and does not involve a change in category (labels) (contra Harris and Campbell, 1995:63; Reh, 1984: 37-38: see also Haspelmath, 1998: 327-328). This view of grammaticalised verbs as lexical forms with reduced argument structure may be extended to other areas of verb-grammaticalisation.The " I particularly wish to thank Miriam Butt and Miriam Meyerhoff and the Lingua reviewer, whose suggestions helped to shape this paper in its present form. I also thank the following people for their valuable comments and criticisms on the various predecessors of this paper or the talks reporting about it: Geert Booij, Joan Bresnan, Mark Donohue, Tom Giildemann. Bemd Heine, Gertjan Postma, Ger Reesmk, Nigel Vincent, Lourens de Vries, Jan-Wouter Zwart, and the participants of the HIL workshop on Quotative structures (Leiden, November 1998), especially Johan Rooryck. A short conference version of this paper is to appear in the Proceedings of the 8th International Conference on Austronesian Linguisttcs. held in Taipei similar path of grammaticalisation of report verbs across languages is explained by proposing a list of structural characteristics (of syntax and discourse) that appear to be relevant in allowing the grammaticalisation to take place. Genetically related languages may diverge because they differ in one (or more) of those characteristics: the report verb in Kambera, a language closely related to Buru and Tukang Besi, did not grammaticalise because of a different surface constituent order. 0