Thanks Temp, I'm really stuck as although my new design is no bigger in every aspect (footprint/cubic capacity/floor area), so it's not an extension it is a reshaping, the key of the problem is that although the current house is legit and has had planning permission they will not grant this planning permission as they will use the original small building built in 1932 as the datum. In fact here is their statement "the planning assessment of the proposal would be against the ‘original building’ (rather than the existing building)".
I now plan to seek professional advice to see if they can take it further but now that's further expense but more importantly more delays.
I posted here in the hope that somebody else has had the same problem, I keep thinking that they really don't have a basis to refuse, but I guess planners are on another planet?