The story you were given has elements of the truth but not at its entirety and the many issues associated with the "sideways" procurement of the Mk3. My main input to this thread is that a rather brave intiative taken by several very senior officers in the MoD during the post '97 Defence Review came a croper by a rush to get to contract for what was inevitably going to be a complex software dependent system requiring clearance and airworthiness in the most demanding of special flight profiles - not just in cloud!!. The MoD PE was transitoning to become the DPA (now DE&S) and the project management system was bereft of safeguard attitudes (in the rotary section in particualr) and adequate processes to give proper visibility to key players of the decisions being taken (at quite a low staff level) until it was too late - and don't I know it!! Boeing did not help by being too "customer" friendly, misleading themselves as to what the customer would accept, despite relevant inputs to the contrary, do not forget Philly nealry bankrupted themselves in the process.
The saga didn't end of course - as UK is still without a fully spec'd Special CH47 that the Mk3 was attempting to introduce (although its spec was never going to give the full capability required intially even if it had been declared fit for service). More to the point many would argue that those 8 could have been retrofited at reasonable expense to an adequate special standard but certain key politicians ran away from the responsibility and opted for the Mk3R programme instead as they (as is often the case with this government IMO) did not want the risk (low as it was calculated) of another clearance/airworthiness debacle associated with the CH47 following the Mk3 saga and the (still ongoing) Mull accident.
Given the subsequent wider airworthiness matters now public - do you blame them?? Still means the special guys who are at the forefront of our efforts elsewhere still haven't yet got the complete spectrum of what they need and deserve.
PS - before we believe that the Mk3Rs are the most expensive helos to enter UK service - why not check on how much has been spent since inception to present day on creating and buying the 30 or so (original order 44) of the Merlin Mk1s?? - never mind the ongoing upgrade programme
