Well, here is the news:
Wheels have had the bike through their workshop and I've received an email confirming a full refund less £604 for the 500 odd miles I've done.
I've accepted this to move on from it. I think Wheels have acted in a legally correct and sensible way to conclude this. It was an inevitable conclusion really, just a shame they've lost a customer because of the way it was processed.
Congrats on getting a result. Shame about the deduction. It’s odd you deduct the delivery milage, the test ride milage and the to and fro milage trying to get fixes and they haven’t priced goodwill and lost custom very well.
