Westway in west london are VW specialists (Tel 020 8577 5669) Based in Heston. They will be able to sort it, they usually collect and deliver the car aswel.
I had heater matrix problems in my MK2 16v, firstly it started leaking water, so i turned the heat off which seemed to stop the leak. I left it for a couple of months, then one day on my way to work, while stuck at a set of trafic lights the steam burst out all over the inside of the windscreen and out of the dashboard - not good. After that i got the matrix bi-passed. It was freezing in winter, and the window kept misting up ever couple of minutes - very annoying. I'd get the matrix replaced if i was to do it again. Good luck