Two of Cornwell's former TBWA\GGT colleagues - Nick Moore, now Tequila\ London's executive creative director, and Richard Madden, the agency's planning director - will join him in the start-up alongside Simon Foster, the managing director of PHD Confidential.
The talks are said to have reached an advanced stage. However, the discussions are shrouded in secrecy because Moore, Foster and Madden have not yet resigned from their current jobs.
Several heads of agreement contracts have been drawn up, but the parties have so far failed to agree on them. Discussions are thought to be sticking over whether or not the partners will get equity in the resulting agency and how much Mother invests in the venture.
However, the agency, which is scheduled to launch in September, is believed to have a name and a founding client lined up already.
The Mother partner Andy Medd denied anything had been decided. He said: "I can confirm that at this moment we are not launching a direct marketing agency."
Cornwell and Mother opened discussions at the end of last year, with Moore, Madden and Foster coming on board at a later stage.
Cornwell left TBWA\GGT a year ago, shortly after he was moved into a senior European role following the agency's merger withTequila to create Tequila\London.
Cornwell worked alongside the Mother founder Robert Saville at GGT before Saville left to set up Mother.