The latest move follows comments from TTF president Stephen King at the organisation’s recent AGM about the two bodies increasing their co-operation.
In line with the TTF’s support for more unified timber supply chain representation, he said, it was "open to a possible closer working relationship".
The MOU stresses that the two would continue as separate entities, with no dilution of respective roles.
But a new company would ‘bridge’ the bodies, with a board comprising up to three representatives each from the TTF and BWF governing bodies.
While serving the specific interests of their membership , the BWF and TTF teams would work closely together and collaborate on "complementary activity" and "amalgamation of core activities".
The MOU says the chief executive of the new company would also be joint chief executive of the TTF and BWF, supported by heads of woodworking and timber trade.
"This is about linking up two strong, well-established organisations, both in good financial shape, who are growing and developing well to further enhance what we do," said BWF chief executive Iain McIlwee.
"It’s a very exciting opportunity," said Mr King. "I believe this will raise the profile and understanding of the benefits that the timber supply chain provides to the economy, environment and individual customer sectors," he added. "It could drive research and enable projects to influence policy makers, improve market development and supply chain interaction and aid collaboration to resolve common problems and grow markets."
It’s too early to say what the new organisation would be called but, as both the TTF and BWF are based at The Building Centre in London, the logistics aren’t a major issue.
There remains "a lot of detail to work through", said Mr King and at this stage it is about consulting with the BWF and TTF memberships.
"It’s very much a work in progress," said Mr McIlwee. "We’ve set down our thoughts in the MOU to give it some shape and form and put it out to membership for consultation to absorb their thoughts and ideas and, assuming those thughts are positive, we can move on."
He added that initial feedback to the BWF had been positive. "We had a council meeting recently and they were very happy with the MOU as tabled and very keen for it to progress as they can see the opportunity it creates."
If there is sufficient support it is hoped the document will be signed by the end of August.
Mr McIlwee added that, with a general election scheduled for May 2015, the timing of the two organisations coming together was perfect.
"If we can do something over the next 12 months and get something in place in time for our AGMs next year it will be very well timed with the political cycle," said Mr McIlwee. "Our new lobbying inititiative will be timed with the new MPs coming into the house. The strong, united message we will carry will make us more attractive for politicians to talk to."
Mr McIlwee did not dismiss the idea of further unification of different organisations in the timber industry.
"We would continue to work with the remainder of the timber industry through the Timber Industry Accord," he said. "If others were interested in becoming part of what we’re creating, then I’m sure they would be welcome."
