I agree with your view of things and more importantly so does the CAA. The AIC on the 'approach ban' is here:
http://www.nats-uk.ead-it.com/aip/cu...6_P_100_en.pdf
Maybe ATC didn't realise you were already below 1000'? Might be worth giving the Tower a call to discuss - ATC are usually amenable to such conversations and the RT will have been recorded. If you're lucky, there might even be a radar tape that can be replayed to decipher what went on...