The idea is being raised by Co-operatives UK General Secretary Ed Mayo at a conference for journalists later this month.
The event, organised by Dave Boyle, Chief Executive of Supporters Direct, and supported by the National Union of Journalists and Goldsmiths College, will discuss if the co-operative model can help local newspapers make a healthy profit and remain relevant.
Mr Boyle told the News: “I was reading about how local newspapers were apparently in terminal decline, but the more I discovered, the more it seemed like the problem wasn’t so much newspapers as the business model they pursued.
“Local newspapers are struggling for advertisers, as people find eBay and Gumtree work better for selling their stuff, while jobs migrate to national job sites. But there are plenty of places where owners have kept their news values high and circulation is holding up well.”
Mr Boyle believes that if newspaper groups were not so big and did not build up debt through acquisitions, local newspapers could return a healthy profit.
He added: "Local newspapers exist on the basis of trust from their readers. But when you move the production office out of town, and the phone number is no longer a local one, people start to think the paper is no longer on their side, or aware of their issues. Mistakes creep in, like getting the name of the main street in the town wrong, and readership starts to decline.
“Because the drive is to cut corners, they respond by filling the pages with centrally generated copy, such as TV reviews and recipes, which is crazy. The last place I’d look for what to cook is my local newspaper, but that’s the first place I’d look for local news, but in too many places, the latter is squeezed by the former.”