This may be a completely stupid suggestion but the main aim is for Commercial traffic to have ATC control in what is currently "open" FIR - if this is wrong then skip to next post.
The GA, paragliding, ballooning fraternity etc. mostly use open FIR hence potential conflict, hence suggestion of Mode S.
However a huge percentage (90% - 95%?) of the above GA et al are below 10,000 ft and the majority (90-95%?) of commercials are above 10,000 feet. Why not just make all UK airspace over 10,000 feet controlled (Type B?) in which a mode C (not S) transponder is mandatory?
There must be some fault in my logic but it would seem to fit the requirements of all and would cost bugger all to implement.