As many as eight of the UK's largest carbon offset providers are in talks to form a trade group designed to bolster the sectors credibility and isolate disreputable operators.

BusinessGreen has learnt that The CarbonNeutral Company, Carbonclear, ClimateCare, Climate Friendly, co2balance, NativeEnergy, targetneutral and Terrapass are the firms currently engaged in negotiations to form an industry coalition.

A source close to the proceedings said that the list of founding members has not been finalised and that more firms may yet join. But he added that talks were at a "pretty advanced" stage.

The aim of the group would be to provide a unified voice for reputable operators that support verified and credible emission reduction projects.

The offset sector has been dogged by controversy in recent years, following a series of accusations that some carbon offset projects fail to deliver promised emission cuts. As revealed by BusinessGreen earlier this month, the new coalition would also aim to tackle the issue of disreputable offset providers by using "agreed entry criteria to ensure only providers of genuine offsets are involved".

A second source close to the talks said that they represented a hugely " encouraging" move that underlines the carbon offset sectors growing maturity.

The news comes as the government this week unveiled its long anticipated code of conduct for the offset industry, announced plans for a quality label for UN-approved offset credits, and challenged providers to develop an industry standard for voluntary offsets that would allow them too to carry the government-backed quality label.

The eight companies currently considering forming a formal trade group issued a joint statement welcoming the code of conduct and signalling that they would work with the government to continue to develop confidence in the global market for carbon offsets.