I am very curious about this thread. I have some reservations about it and I speak from a strong background. Firstly, I have in excess of 1500 hours on the BN2A. Secondly I did a flight over London on 27th September 1979 for the purpose of dropping 10,000 leaflets for the charity Spina Bifida and Hydrocephalus Association. Lord Lichfield dumped the leaflets from the aircraft and David Bailey and his friend Cecil Beaton were at the charity show in London to raise money by selling their photographs for the Association. It was highly successful.
The CAA were very difficult about it at first and refused to give us permission. After a lot of lobbying they gave in and insisted that we maintained 1500' and kept contact with Heathrow, which of course we did. The row after the drop was short lived but Westminster City Council wanted to know who would pay for cleaning the streets of London!
However, the CAA would have to give permission for a banner flight and I rather doubt that 1000' would be approved. An engine failure over London would be a tricky problem - not insurmountable - but tricky with a banner and 500' would be a cushion that might well be needed. I have no experience of banner towing on the Islander but I can imagine the problems. As to permission it seems that the question is being avoided - I just have to wonder why!