Abstract Both projectable and non-projectable versions of Horava–Lifshitz gravity face serious challenges. In the non-projectable version, the constraint algebra is seemingly inconsistent. The projectable version lacks a local Hamiltonian constraint, thus allowing for an extra scalar mode which can be problematic. A new formulation of non-projectable Horava–Lifshitz gravity, naturally realized as a representation of the master constraint algebra studied by loop quantum gravity researchers, is presented. This yields a consistent canonical theory with first class constraints. It captures the essence of Horava–Lifshitz gravity in retaining only spatial diffeomorphisms (instead of full space–time covariance) as the physically relevant non-trivial gauge symmetry; at the same time the local Hamiltonian constraint needed to eliminate the extra mode is equivalently enforced by the master constraint.