Now what?
 

The distance learning JAA ATPL school I attend (outside UK) only gives you one chance to pass the mandatory test. If you fail, your exam fee(s) at the CAA will forfeit and you will have to wait another 6 weeks to re-take the mandatory. I really don't think that it should be necessary to first pass the mandatory and then book the exams, which would give me 6 weeks to forget what I hopefully learned for the mandatory.

What is the practice in the UK?

The school should not be easily able to prevent you sitting the exams. They need to sign your application form, but once you have done so (and that is when your fee is paid, so you cannot forfeit this money) the sitting is booked and as far as I am aware only you can change the booking. There is a fee for changing bookings, but as long as you do so in time you lose only this, not the full exam fees.

The test may be mandatory, but passing it is not, at least in any school I know of. Normal practice is for us (as a subject instructor in my case or for the CGI) to advise on whether to take the exams or defer. I occasionally strongly recommend a student to defer, if he or she is really not ready, others choose to do so themselves in discussion with me or my CGI. As long as the course requirements are completed we cannot legitimately stop students taking the exams: that is ultimately their choice.