NTL and Telewest are reported to be working towards an operational alliance as the first step for an eventual merger.
The two cable operators are considering collaborating on purchasing and retail strategy, sharing customers and converging products.
According to the Financial Times, if this proves successful, further tie-ups could include merging advertising campaigns and eventually mergering most of the two companies' operations.
But a full merger seems unlikely at the moment because of debt burdens. NTL's net debt is £10.9 billion sterling and Telewest's is £4.8 billion.
One of the first operations to be joined is expected to be set-top box purchasing.
The two companies, which have 1.5 million customers in their two separate franchises, spend about £300 million a year on the boxes.
This should be reduced by tens of millions if they purchase jointly, which they seem likely to be doing by the end of this year.
PA