Excellent decisions. Well done.
Rest assured, if you had landed when the other aircraft still had the rubber attached to the asphalt you'd have been chewed out.
I had to go around twice at EGBJ during the CPL Skills Test, owing to aircraft lined up at the threshold sitting doing nothing after being cleared for take-off, so don't beat yourself up. You did fine.
If you want to develop thick skin when dealing with ATC try a spot of training at a certain North London AD - those familiar will know where I mean!!
That same AD has a 200' rule - no clearance obtained by 200' AGL and around you go. At 1/4 mile (as you thought at the time) you would have been well below that.
I'm not suggesting that this should be the rule as opposed to the norm everywhere as experienced controllers can sequence GA aircraft quite tightly, although they should always be aware when student pilots are flying solo and be prepared to give some leeway.
Also, good drills on the part of the ATCO making the call to the FS to get some background info on the pilot - a fuller picture always helps.
Again, well done all.
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