Finding an optimal key assignment (subject to given constraints) for a key predistribution scheme in wireless sensor networks is a difficult task. Hence, most of the practical schemes are based on probabilistic key assignment, which leads to sub-optimal schemes requiring key storage linear in the total number of nodes. A graph theoretic framework is introduced to study the fundamental tradeoffs between key storage, average key path length (directly related to the battery consumption) and resilience (to compromised nodes) of key predistribution schemes for wireless sensor networks. Based on the proposed framework, a lower bound on key storage is derived for a given average key path length. An upper bound on the compromising probability is also given. This framework also leads to the design of key assignment schemes with a storage complexity of the same order as the lower bound.