Coalition has been hard on the LibDems. Their national membership is down to about 48k from 60k, their major private donor is now serving a seven-stretch and in government they've lost £1.79m a year in 'Short' money and a further £0.24m in Cranborne money. To all practical purposes, the party is bust and broke.
Benedict Brogan suggests in the Telegraph that Cameron is tempted to use the inducement of State funding for incumbent parties to cut a deal that would gain him LibDem support for constituency reform, avoiding the rocks of Scylla only to plunge into the whirlpool of Charybdis. A Statesman, of course, rather than a mere jobbing opportunist playing politics, would steer a course that avoids both.
I still don't think politicians realise quite how vehemently the idea of State funding for the big three parties is loathed at the grass roots; It's the one issue, for example, warranted to bring me out onto the streets and spend my savings campaigning against it. All Cameron would achieve would be the exodus of the last of the CP's members to UKIP.