Flyer70: thank you!
ExXB: I had found that regulation to. They had informed me of the downgrade 4 weeks before the flight which I think means I'm not entitled to the re-fund. Might be worth a little more research though.
I found a good contact on the flyertalk forum, who has responded and resolved the issue to my satisfaction. The contact didn't seem to have much respect for the BA customer service department either!!