There is a tremendous amount of misinformation and speculation on this thread! Indeed the link to CAP658 is about the only useful post!!
The facts.....
The "400ft rule" applies only to models over 7KG. Above this weight they can only (legally) be flown higher inside an ATZ (obviously with permission) or if a special NOTAM is obtained, as is normal for model shows and large events.
Models over 20KG require a CAA exemption which is obtained via the Large Model Association (LMA) who act on behalf of the CAA. The model has to be inspected during the building process, have certain redundancy within its onboard systems, and pass a supervised test flight program. It is then "licensed" to be flown only by certain named pilots.
All models are subject to the "catch all" provisions of the ANO such as not recklessly or negligently endangering etc. etc.
Also, in the UK a model can only legally be flown within the unaided sight of the pilot. There is a new special procedure for so called "First Person View" systems where the pilot wears goggles to view a TV picture from an on-board camera. In this case the master transmitter must be held by a person flying the model normally. He can give control to another transmitter (buddy box) used by the person wearing the goggles. However, the pilot with the master transmitter must not allow the model to go out of his unaided sight and must re-take control if there is any danger of this happening. He is legally responsible for the safety of the whole flight (i.e PIC).
All of this relates to recreational model flying. There are other rules for commercial unmanned aerial vehicles.
Hope this helps.