A method and associated node structure (11) for the efficient and reliable transmission of delay sensitive traffic in a packet network (10) is disclosed. The method provides bounded end-to-end delay for all delay sensitive traffic and can guarantee loss-free transmission to that part of the delay sensitive traffic which has such a stringent requirement. To achieve statistical multiplexing gain, some loss is permitted for the rest of the delay sensitive traffic, with discrimination among different loss priority classes based on the corresponding degree of loss sensitivity. Bounded end-to-end delay is obtained by performing statistical multiplexing at the switching nodes (11) on a duration limited basis through use of a unique queuing discipline at the network nodes (11). This queuing discipline is instrumental in guaranteeing loss free transmission for the class of traffic with such a requirement.