Finally at last I have got a resolution to this. The supplying dealer has told me that if a warranty that they sold doesn't get claimed on, the warranty company puts a sum into an accaount assigned to that dealer. They can then then dip into that if there is a refused claim that they are then liable (either legally or morally).

They have used this to cover the cost of my engine rebuild. A massive weight off my mind as I didn't have a spare

 

you are very welcome, glad it is resolved.