Analytical and numerical methods are applied to investigate the transient evolution of an inviscid bubble in two-dimensional Stokes flow. The evolution is driven by extensional incident flow with a rotational component, such as occurs for flow in a four-roller mill. Of particular interest is the possible spontaneous occurrence of a cusp singularity on the bubble surface. The role of constant as well as variable surface tension, induced by the presence of surfactant, is considered. A general theory of time- dependent evolution, which includes the existence of a broad class of exact solutions, is presented. For constant surface tension, a conjecture concerning the existence of a critical capillary number above which all symmetric steady bubble solutions are linearly unstable is found to be false. Steady bubbles for large capillary number Q are found to be susceptible to finite-amplitude instability, with the dynamics often leading to cusp or topological singularities. The evolution of an initially circular bubble at zero surface tension is found to culminate in unsteady cusp formation. In contrast to the clean flow problem, for variable surface tension there exists an upper bound Qc for which steady bubble solutions exist. Theoretical considerations as well as numerical calculations for Q > Qc verify that the bubble achieves an unsteady cusped formation in finite time. The role of a nonlinear equation of state and the influence of surface diffusion of surfactant are both considered. A possible connection between the observed behaviour and the phenomenon of tip streaming is discussed.