The Co-operative Group has 3.5 million members, while United Co-operatives has 930,000.

They will meet in April and May to consider the merger and if it is approved, the new enlarged society is expected to begin operating in late July.

The enlarged group would operate from sites stretching from Cornwall to the Scottish Islands, with particular strength in the north of England and the north Midlands.

Market share

The Co-operative Group is the UK's largest, with an annual turnover of £8bn. United Co-operatives has a turnover of £2.5bn a year.

They provide a range of businesses including food retailers, financial services, funeral services, pharmacies and shoe repairers.

A Co-operative Group spokesman said it was too early to say if a merger would result in job losses.

In general, co-ops are owned by customers and employees who have chosen to become members by investing a minimum of £1.

Co-operative retailers had a 20% share of the British grocery market in the 1950s, but have lost ground to supermarkets in recent years and seen their share shrink to closer to 6%.

There are currently around 35 co-operative groups in the UK.

The first retail co-operative was founded in Rochdale in 1844 as the Rochdale Pioneers Society, which is now part of the United Co-operatives group.

In 2000, Co-operative Wholesale Society and the Co-operative Retail Society merged and in 2002 it changed its name to the Co-operative Group.