Intermediate crack induced debonding (IC debonding) is a common failure mode of RC beams strengthened with externally bonded FRP reinforcement. Although extensive research has been carried out on IC debonding, much work is still needed to develop a better understanding of the failure mode and a more reliable design method. This paper first examines the limitations of existing finite element (FE) approaches for modelling IC debonding and then proposes an improved approach. In the proposed approach, concrete cracking is modelled using the crack band model while the interfacial behaviour (between concrete and both internal steel and external FRP reinforcements) is captured using interfacial elements with appropriate bond-slip properties. These features enable the close prediction of both the spacing and the width of major cracks in the concrete, which have an important bearing on the IC debonding failure process. The capability and accuracy of the proposed approach are illustrated through a comparison of the present FE predictions with the test results for an example beam.