SD. Thanks for your reply.. it seems like the CAA are 'protecting' the interests of the UK training scene.. albeit in a way that defies logic!
The standards document seems to be written badly, failing to make this position clear.. I read some minutes from a JAA meeting a while back, I cant remember where, but it did point out that CFI's could circumvent the JAA training sylabus to teach JAA students by doing the FAA route... I guess this addition to Doc 39 was a result of that meeting.
If I had problems I would probably have my JAA license revoked too...