Reproducing diffuse sound fields such as reverberation, audience noise or rain using loudspeakers is an important part of creating surrounding and enveloping spatial audio. This paper presents the results of two listening tests that investigate how the inter-channel correlation between loudspeakers affects the perceived diffuseness. In the first experiment inter-channel cross-correlation coefficient (ICC) was varied for pink noise stimuli reproduced using 4 different loudspeaker layouts and at two listening positions. In a second experiment, 1/3 octave noise stimuli were investigated in a similar manner using variable ICC and two listening positions. The ICC was found to have a large effect on the perceived diffuseness in both experiments and for all frequency bands (125 Hz, 1 kHz and 8 kHz) where correlation between loudspeakers would reduce the perceived diffuseness. Although frequency was found to be a significant factor, the ICC and listener position had larger effects with although moving off-centre only reduced the perceived diffuseness when fewer loudspeakers were used. Off-centre appears more robust to small amounts of correlation between loudspeakers as the loudspeakers signals no longer arrived at the listener at the same time.