To answer the AVO,
IIRC 20 incidents since RPAR was introduced (about 3 and a bit years ago).
It seems that the 'take avoiding action separation on all traffic, known or unknown' is the knee jerk reaction to the fact that your data label may transfer to another aircraft in close proximity AND the aircraft you are talking to dissapear from radar.
The 'radar contact lost, are you visual' would seem the most appropriate action, however, this is a knee jerk reaction and not rational thinking!
I don't think that you can go finger pointing that the MoD is at fault on a whole (for once). From what I have seen the system is proven by the yanks and although maybe not the 'best of the best' it is by far adequate for the job with today's reduced budgets. I am no wiggly-amp type, but I am sure the boffins at RPAR HQ are checking their computer codes for a solution.