The development of complex, multi-user, interactive systems is a difficult process that requires both a rapid iterative approach, and the ability to reason carefully about system designs. This thesis argues that a combination of declarative prototyping and formal specification provides a suitable way of satisfying these requirements. The focus of this thesis is on the development of software tools for prototyping interactive systems. In particular, it uses a declarative approach, based on the functional programming paradigm. This thesis makes two contributions. The most significant contribution is the presentation of FranTk, a new Graphical User Interface language, embedded in the functional language Haskell. It is suitable for prototyping complex, concurrent, multi-user systems. It allows systems to be built in a high level, structured manner. In particular, it provides good support for specifying real-time properties of such systems. The second contribution is a mechanism that allows a formal specification to be derived from a high level FranTk prototype. The approach allows this to be done automatically. This specification can then be checked, with tool support, to verify some safety properties about a system. To avoid the state space explosion problem that would be faced when verifying an entire system, we focus on partial verification. This concentrates on key areas of a design: in particular this means that we only derive a specification from parts of a prototype. To demonstrate the scalability of both the prototyping and verification approaches, this thesis uses a series of case studies including a multi-user design rationale editor and a prototype data-link