It is possible to sit exams throught Europe as stated but the CAA insist that you sit the essays in the UK if you want them to issue you a licence
Now that is something I'm not aware of, is there any official documentation to that effect?
It shouldn't make a difference where you do the exams as long as it is an approved exam centre.
Has anyone actually been refused a licence because they did their essay's in another country??
To quote the CAA themselves from their website:
Personnel Licensing - Maintenance Engineers
This part of the department is responsible for the licensing of Aircraft Maintenance Engineers, the approval of training courses and Organisations under Part-147.
Licences are issued under Part-66, which provides a common and mutually acceptable standard across EASA member States.