The centrist Lib Dems are the junior partner in Britain's governing coalition, formed with Prime Minister David Cameron's much larger centre-right Conservatives.
But with a general election coming in May 2015, Clegg aired the idea of sharing power with the centre-left Labour Party.
He also accused the Conservatives of becoming "much more ideological" since striking the coalition deal after the 2010 election.
The Times newspaper called Clegg's comments a concerted attempt to regain "equidistance" between the two parties while remaining in government with one of them.
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"There's nothing like the prospect of reality in an election to get politicians to think again and the Labour Party, which is a party unused to sharing power with others is realising that it might have to."
He said that if such a pact was formed, the Lib Dems would set out to restrain Labour from spending too much. The current coalition is working to reduce the budget deficit it inherited from Labour.
"If there were a Labour-Liberal Democrat coalition, we the Liberal Democrats would absolutely insist that government would not break the bank," said Clegg.
Asked Monday whether he would consider a coalition with the Lib Dems, Labour leader Ed Miliband said "let's not get into that".
"I don't think the parties, in advance of elections, should be engaging in this," he told ITV television.
"I'm not interested in backroom deals.
"What I'm looking for is a majority Labour government."
Polls over the last 18 months consistently suggest Labour is heading for a comfortable majority at the next election.
He told BBC radio: "There's a sense of insipid centrism that is reassuringly unthreatening to people. That's not the same as liberalism.