The stunning model and the 'Doctor Who' star - who split at the end of 2011 - attended an exclusive London's Men's Fashion Week party earlier this week and onlookers say they couldn't keep their hands off each other.
A source told The Sun newspaper: ''They made a big deal of turning up and leaving separately so they wouldn't be photographed together.
''Once inside the event they were all over each other.''
This is not the first time Daisy - daughter of Gavin Rossdale and Pearl Lowe - and Matt have been linked together again since their split.
Last June, the pair bumped into each other at a music event in London where they enjoyed a romantic cuddle, leading onlookers to speculate they may have secretly reconciled.
A source said: ''Matt was trying to disguise himself by wearing his hood up as he hobnobbed backstage. But when Daisy came over he didn't seem to care who was watching.
''His eyes just lit up and they were locked into deep conversation - hugging each other all the time. At one point he gave her bum a big squeeze. If they're not together any more then they have a funny way of showing it.''