According to the present invention, an architecture of multiple agents is provided for setting up and enforcing policies within each site of a virtual network. A policy server represents the global policies of the site and each agent manages its own policies. Policies are dynamically downloaded from the policy server into agents that carry the responsibility to enforce them. Agents propagate their policies to the policy server to detect any conflict that may rise between agents during dynamic mapping and resource reservation. A negotiation mechanism is provided to resolve such conflicts. An authorization-based mechanism is also provided such that agents must request authorization before performing any action, in response to which a ticket is delivered to the requesting agent for accountability and security reasons.