Abstract
We construct a new class of two-dimensional field theories with target spaces that are finite multiparameter deformations of the usual coset G/H-spaces. They arise naturally, when certain models, related by Poisson-Lie T-duality, develop a local gauge invariance at specific points of their classical moduli space. We show that canonical equivalences in this context can be formulated in loop space in terms of parafermionic-type algebras with a central extension. We find that the corresponding generating functionals are non-polynomial in the derivatives of the fields with respect to the space-like variable. After constructing models with three- and two-dimensional targets, we study renormalization group flows in this context. In the ultraviolet, in some cases, the target space of the theory reduces to a coset space or there is a fixed point where the theory becomes free.