—Multirate multicast is a powerful methodology of multimedia communication in heterogenous networks. A variant of multirate multicast motivated by scalable multimedia streaming is layered multicast, where the transmitted signal is presented in successive data layers. With recent advances of network coding theory, many layered multicast schemes using network coding have been proposed to improve the performance of traditional routing based layered multicast. They divide the network into different layers and construct a unirate multicast network code for each layer. However, these schemes do not perform network coding between data layers, and consequently cannot realize the full potential of network coding. In this paper, we propose a novel approach to layered multicast that allows network coding of data in different layers. This relaxation lends the proposed scheme greater flexibility in optimizing the data flow than previous layered solutions, and thus achieves higher throughput.