As far as I'm aware, to become a FI:
1. You will need to do 'commercial level knowledge' exams. Until the nonsense of JARs sorts itself out, this means the temporary national CPL exams or the full daft EuroATPL exams.
2. You will need to do the FI(R) course.
3. To instruct for remuneration you will need to complete a commercial licence AND get a JAA Class I medical - at the Belgrano. If you want to instruct unremunerated, your PPL and JAA Class II medical will suffice.
There are better ways of reducing training costs than the safety-eroding NIPPL. These have been presented to both Ron Elder of the CAA and to AOPA's Martin Robinson. The chief villains are fuel cost and the stupidity of ditching the BCPL/FI(R) self-improver route. A National Variance to JARs could easily restore the level of 'commercial knowledge' practically needed to instruct at PPL level IN THE UK for remuneration (as well as the UK Class II medical which still exists for balloonatics etc - but which the CAA won't allow you to hold for a current BCPL any more) - I hope that someone will see sense as otherwise there will be few UK PPL instructors left in a few years' time