Plans for a separate quality mark for social enterprises in Scotland have been put on hold after the Scottish Social Enterprise Coalition decided against backing the scheme.
Senscot, the network for Scottish social entrepreneurs, published plans two weeks ago to introduce a Social Enterprise Badge for businesses north of the border.
It said its members felt the criteria for the nationwide Social Enterprise Mark, introduced by the Social Enterprise Coalition in England at the start of February, were too lax. It said social enterprises should be allowed to distribute only 35 per cent of their profits to shareholders, rather than the 50 per cent allowed by the mark.
But it has said it could "step back" from these plans after a response from the Scottish Social Enterprise Coalition, the umbrella body for social enterprise north of the border.
In a written response to the Senscot plans, published on Senscot's website, the SSEC said the decision could create "reputational damage to social enterprise in Scotland".
It could also lead the movement to be perceived as "insular and parochial, instead of enterprising and outward-looking", and might confuse the general public, it said.
The SSEC also felt that the proposed badge would need to be backed by government money, and that this money could potentially be better spent supporting social enterprise in other ways.
But it said it supported the principles behind the badge and felt its stricter criteria would have been "far preferable to the mark's more relaxed approach".
Senscot said that it would consider its options.
"The viability of a Scottish identifier would depend on the wholehearted support of our sector," it said in an open statement to members. "This decision by our coalition changes things and raises the prospect of a protracted and potentially damaging controversy over an issue which is not central.
"Our board will fully discuss our options but our priority will be to avoid wrangling."