TV world-beaters? These Britons say they've got talent

He is the world's most famous talent judge, whose zero tolerance approach to the tone deaf and hapless hopefuls has earned him a reputation as one of the cruellest men in showbusiness. But when it comes to negotiating his own contract, it appears that Simon Cowell is not quite so tough.

For the past three months, Cowell has asked the retail billionaire Sir Philip Green to help him conduct negotiations over the future of one of his shows, American Idol, in an attempt to secure him the best possible deal. Last year, Cowell earned about $36m (£21.8m) from the show and his contract is up for renewal next year.

An industry insider told The Independent: "Sir Philip Green has basically been acting as Cowell's manager... He has been turning up at meetings and acting as bad cop to Cowell's good cop. Green has been using his financial expertise to try to crowbar a few extra million out of people who [Cowell's] already contracted to."

Yesterday, it emerged the negotiations were part of a blossoming financial partnership between the top businessman and the showbusiness impresario, who are poised to launch an international entertainment company which, they hope, could become bigger than Disney.

The two men, who have been close friends for years, are thought to be planning a showbusiness company that will handle everything from the creation and production of new show formats to talent management and merchandising. If the project goes ahead, people across the world could soon be clamouring for Susan Boyle puppets, mugs and duvet covers, and before long, X Factor shops might be a common sight on the high street.

The Independent understands that the pair is yet to decide on the company's exact remit but Cowell plans to funnel his television earnings – and the money he makes through managing winning acts – into the project.

It will be the first time the men have worked together but they have often been seen dining in fashionable London restaurants and holiday at the same resort in Barbados. Both bring separate strengths to the table. Cowell, who has made about £112m through shows such as American Idol, Britain's Got Talent and The X Factor, will be in charge of coming up with formats for programmes. He will also retain his role as a judge.

Sir Philip, who owns Top Shop and Bhs and is worth about £4bn, will oversee the company's finances and be put in charge of merchandising. It will be the first time he has ventured into showbusiness. It is unclear how much of his own money he will contribute to the project. The business will be based in London and Los Angeles, where Cowell has a house.

By securing the rights to his future shows, Cowell would follow in the footsteps of Oprah Winfrey, who runs The Oprah Winfrey Show through her own production company and launched a monthly women's magazine, O, in 2000. It has more than two million buyers.

Max Clifford, who represents Cowell, confirmed the men were planning a joint venture and a deal was likely to be announced in the next few weeks but it would be "premature" to go into any detail. "The two of them are simply combining their talents in areas where there is a common benefit. What they're doing is discussing and working out ways of doing business together, but there are still lots of negotiations to go through. What I could tell you now might be completely different in two weeks time."

It is thought Cowell has become frustrated with the lack of control he has over his programmes, and that the new company would allow him to regain command of the formats he devises before rolling them out.

The move offers Sir Philip more than just the chance of negotiating his friend's latest big salary. It presents him with the opportunity to cash in on Cowell's brands and establish himself as a global business figure with one foot in the world of retail and another in showbusiness.

The pair are apparently not set on securing Cowell's three existing shows for the yet-to-be-named company. Cowell has surrendered the rights to them. Profits go to Simon Fuller's 19 Company and Sony BMG while he is paid a salary to be a judge.