Thanks go to Mark_H as I have had a result.

After taking Paypal to the Financial Ombudsman (and it taking over a year) the Ombudsman ruled in my favour. The guy from the FO that I spoke to several times was extremely pleasant and understood exactly where I was coming from.

I received a letter from Paypal that they were to credit my account with the full amount. I have since transferred the money into my bank account and closed my Paypal account.

If anyone is going through a similar experience then I would be happy to help them in any way, having been through it myself.

Thanks again Mark_H,

Keith.

System 1 : 568.2, 562v3, 596, 506, 504, DSP5500 / 5000c, 556 Amp, B&W DS6 sides, REL Storm, SIM2