They should be able to.
I initally registered my interested with NATS in june, i was sent an email telling me to book a stage one test, but i wanted to wait a while until starting the application process.
I recieved what sounds like a similar email to you, telling me i had to book my stage one before a certain date otherwise they would assume i did not want to apply again and they would cancel my application. So i called HR explained i didnt wish to start the application process until the end of the year/jan 2009, and they put my application "on hold" for 6months.
They also advised me to give them a call if i wanted to apply any time before this so they could unfreeze me. Was all very straight forward.
Although i think it was only so easy because i had not done any stages, i'm not so sure if you would be able to put off applying fo stage 2 for example having already passed stage one unless there was real need to.