Editor with group editing capability

Hey so I have a bit of a challenging requirement – I need to create a user with priveleges similar to an editor. But this user should have the ability of creating users, and editing only those user’s posts who they have created. Think of it as editor groups. Oh and almost forgot to mention all of this needs to happen programatically – which means the list of user’s an editor has the right to manage, updates dynamically based on new users created by that editor. Any clue how to go about doing this? Help would be MUCH appreciated.