In 1998 Tony Blair commissioned former British chancellor, President of the European Commission and leader of the SDP, Lord Jenkins, to propose a new electoral system that would meet the particular needs of Britain. He did, and here it is. So the Lib Dems should plonk it on the table in front of the Tories, point out that they can save the British people the expense of another report, and cut to the chase. Referendum or not? And just as importantly, public funding (only) of the campaign, to stop certain members of the House of Lords trying to buy the result.
The report proposes a system called AV Plus. It would allow for AV in single seat constituencies, with top up seats from a county based list, meaning that every MP will be directly elected and have a geographical constituency, and whilst not as proportional as other systems, would be an improvement on FPTP.
Curiously, I have a suspicion that if the Tories actually looked at it properly (as opposed to knee jerk dismissal of all electoral reform) they may find that it is a system they could live with.