Sclerotia approximately spherical, 1-3mm diam., or irregularly elongate, to 5 mm long, dense, brittle-fleshed, the long, irregular sclerotia breaking readily into smaller parts, pale yellow to bright orange, composed of inflated, clamped, short-celled hyphae 13-43 x 5-17 µm, with granular oily contents, with thin to slightly thickened, acyanophilous walls to 1.0 µm thick. Cortex scarcely distinguished.
Teleomorph: basidiomata resupinate, effuse, originating as a cottony weft of pale yellow hyphae upon which the hymenium develops, becoming pellicular to soft-membranous, merulioid, with deep fissures and rounded wrinkles when fresh but drying smooth or nearly so, 2-10 mm diam. Hymenium continuous, pastel yellow to orange-yellow, drying concolorous or yellow-orange, margins white to pale yellow. Sterigmata short, conical, 2.5-5 µm long and 1-2 µm broad at the base. Cystidia none, or present as clavate-mucronate cells, not projecting, with a short, rounded to umbonate apex. Basidia (19-) 22-29 x 5.5-7(-10) µm, clavate, four-spored, with a basal clamp. Basidiospores (4-)4.5-5.5(-7) x (2.5-)3.0-3.5(-4.5) µm, buff or pale yellow in print, weakly to strongly dextrinoid, cyanophilous, ellipsoidal or ovoid, smooth, with walls 0.3-0.6 µm thick.
Not formally assessed. Thorn et al. (1998) consider that the species is likely to be overlooked. It has many suitable habitats in northern Britain, and should be sought in other Cladonia heaths.
Growing on decaying bases of Cladonia aff. ciliata. Probably a saprobe for at least part of its life cycle, but basidiospores do not germinate in pure culture suggesting a close biological association.
In GB&I, only reported as a single collection from Caithness (Scotland); see Hitch et al. (2013). Only the sclerotia were present. The species appears to have a panboreal distribution, with other reports from Canada and Scandinavia.