Of concern is the stability and bifurcation analysis of a free boundary problem modelling the growth of multi-layer tumours. A remarkable feature of this problem lies in that the free boundary is imposed with nonlinear boundary conditions, where a Gibbs–Thomson relation is taken into account. By employing a functional approach, analytic semigroup theory and bifurcation theory, we prove that there exists a positive threshold value γ* of surface tension coefficient γ such that if γ > γ* then the unique flat stationary solution is asymptotically stable under non-flat perturbations, while for γ < γ* this unique flat stationary solution is unstable and there exists a series of non-flat stationary solutions bifurcating from it. The result indicates a significant phenomenon that a smaller value of surface tension coefficient γ may make tumours more aggressive.