Having come into this a little late, rather than reiterate things that have already been said, there are some additions which are relevant.
Firstly, the 50% or more loss of power 'rule' isn't one that's applied universally across all civil UK ATC units. It is however, applied (correct me if I'm wrong...) by all NATS units and is certainly considered to be 'best practice'. It applies equally to a B767 or A300 as to a Cessna 421 or a Beech 90 i.e. GA, although I can fully understand why an aircraft commander whose airline is approved for 240 mins ETOPS having shut down an engine just after on take-off as a precaution, might baulk at ATC's response...
Secondly, for situations other than an engine failure on a twin, a hydraulic failure, engine fire, etc., etc., where a Full Emergency will be the automatic minimum response by ATC, there's no requirement for ATC to be told the precise details provided that the flight crew can answer "yes" to the following three key questions (which in cases of doubt, should always be asked):
1."Can you maintain altitude?"
2. "Can you make a normal approach?"
3. "Can you make a normal landing?"
An answer of "no" to any of the above should be qualified with additional information and if it isn't (unlikely I know, but...) then ATC will need to ask some supplementary questions before deciding what response to initiate.
I can understand the flight crew's annoyance in cases where they've reassured the pax that all's well, only to find themselves assailed by blue lights and fire engines on arrival, and indeed I'm aware of a recent minor incident for which ATC simply instigated a 'Local Standby' that resulted in a formal complaint to the airport authority by the airline because the aerodrome fire service deployed its appliances with blue lights flashing and several passengers later accused the captain of lying as he had told them it was only a minor problem!!
