Thank you all for your replies so far folks.
I'm glad to hear that I've not gone crazy and that the CAA haven't instituted some mad policy in my absence from these shores.
As some of you point out it, this (incorrect) technique I'm being told to use probably stems from the fact that the school is geared towards airline wannabes. I find it quite ironic that in training people to "fly like the big boys" they are missing the point that the big boys fly exactly as per the manufacturer's manuals! The post by Sir Niall Dementia re the two techniques taught by the big schools explains all the firewall problems a certain school had in their 172s at an airfield I have flown at.
Prior to my next session I'll have a chat with the instructor in question with POH in hand. I'll also try to figure out why I was told that "we don't touch the mixture below 3,000ft", why I haven't seen W&B/performance charts and why we haven't bothered to dip partially full tanks prior to flying (whole another stories).
I'm hesitant to walk away from the school as I am limited for choice (the next nearest is an extra 45min drive) and they seem to have a good reputation. I'll canvas more instructors at this school to see if this is limited to a subset of instructors or a real policy. However, if they aren't going to operate the aircraft in the correct way I'll take my hard earned money and good looks elsewhere.