Liberal Democrats - We can be kingmakers with half as many seats

By Kylie MacLellan and Andrew Osborn EASTLEIGH, England (Reuters) - British Prime Minister David Cameron's junior coalition partners, the Liberal Democrats, believe they can return to government even if they lose almost half their seats in next month's election, a senior party source said on Monday. In comments that underscore the party's desire to stay in office despite its diminished popularity, the source said the party could win just over 30 seats, down from 57 in 2010, but still have a chance of being a kingmaker to one of the two larger parties. "We need to get into the 30s and then the other parties need to sort themselves out," the source said, adding that this was a realistic target. Most polls show Cameron's Conservatives level with the opposition Labour Party before the May 7 election, but neither party is expected to win an outright majority. That will leave smaller parties, including the Scottish nationalists and the UK Independence Party, vying for influence. The Liberal Democrats have seen their poll ratings slump by around two-thirds since forming a coalition with the Conservatives in 2010. But they say polls underestimate their real level of support by several percentage points. The source spoke as Liberal Democrat leader Nick Clegg held a campaign rally in Eastleigh, southern England, telling supporters his party should not be written off. Clegg angered left-leaning supporters by going into government with Cameron and upset others by reneging on a promise not to raise student tuition fees. On Monday, he said he would use the final full week of campaigning to set out red lines for potential coalition negotiations, something he had previously refused to do. At least 326 seats are needed to secure a majority in the 650-seat British parliament, so either the Conservatives or Labour would have to win upwards of 290 seats to join forces with the Liberal Democrats without the need for a third party. Current polls project both falling short of that target. "A very small difference can make a very big difference to what kind of government we emerge with," said the source. "There is a marginal outcome in 40-odd seats for us, and if we won every one of those marginal contests, then we could get to 40-odd." The Liberal Democrats are focussing on 10-15 very marginal seats, the source said. "We will win or lose lots of our seats by less than 1,000 votes," he said. (Editing by Guy Faulconbridge, Larry King)