Sam Issacharoff sends along this link to a report of the British House of Commons Constitutional Affairs Committee on Party Funding. Here is the summary:

Our inquiry into the funding of political parties took place against a backdrop of significant controversy in several areas. While not the cause of our inquiry, those controversies gave our investigation a new urgency and a specific context. However, these problems and issues are not unique to the UK; other countries have experienced similar problems, and have passed significant and sometimes radical legislation in order to address these issues.
The present system of party financing in the UK is unstable. Unless this instability is addressed, it is likely that dependence on large donations, and consequent negative impact on public confidence in the system, will increase. This report addresses two key questions therefore: a) what changes to the system of party financing would be acceptable to the public and would facilitate the restoration of public confidence in the system; and b) what can the political parties realistically achieve?
Political parties are key institutions in any system of representative democracy. The report outlines the case for their renewal as a vehicle for the promotion of democratic engagement. The report recommends the strengthening of the Electoral Commission and the development of a robust regulatory framework as a starting point for a new funding regime and renewal of the parties. The report then considers the arguments in favour and against caps on expenditure, caps on income and the extension of state funding.
The report concludes that a package of proposals is required: to contain the growth of and, where possible, reduce the amount of money in the system; to eradicate the possibility of buying political influence; and to guarantee an appropriate level of funding to enable political parties to function. Our report proposes that an increase in state funding for political parties should only follow an agreed and comprehensive framework for the limitation of expenditure and donations. It recommends that any proposed extension of state funding in the UK should seek to achieve consensus amongst the political parties; encourage broad public acceptance of any scheme and support transparent and robust regulatory arrangements. It should be workable, focused towards the local level and should be based on the principle that the main purpose of political parties is to be a vehicle for public activism and engagement.
It would be unrealistic to expect the parties to complete the changes immediately. We therefore recommend a transition period to enable parties to adjust and minimise the scope for a financial disadvantage.
Our examination of the systems in Canada, Germany and the U.S.A suggested that, given time, parties respond positively to changes in the funding regime. For most parties, new legislation had provided new opportunities to broaden the party support base. The package of reforms proposed in this report offers a stable route for parties. It provides a basis for a transparent funding regime and a significant step towards the restoration and renewal of the relationship between political parties and the public.