UPDATE:
So strip down completed on Tuesday and 100% confirmed tensioner has failed. Valve and cam damage so a new engine has been ordered and arrived today so should finally have her back just in time for the wknd

So as I have mentioned before the final settlement with VW was 100% parts and 50% labour however I had to really fight for this contribution, initially I was only offered the parts and was facing a £1350 bill (price for full strip down). This I was told would pay for diagnosis and if tensioner was at fault pay for the rebuild also.
The way it works is VW Germany cover the parts however will not put up cash for labour, that comes down to the dealership they basically make the decision to offer a discount and if they do then VWUK will put in also. This I have been told is a 70/30 split so in my case dealership has put 15% in VWUK 35%.
However I am told if the dealership refused then VWUK would refuse also so this puts a lot of the power into the local dealership you use!
It's also worth noting that I am 1.5 years out of warranty with 55,000 on the clock at time of fault!!
The fact I had logged an issue with VWUK about the tensioner and had mentioned a rattle at a recent service and the car had FVSH all helped in my negotiating. I also went down the not fit for purpose route which I feel helped a little also.
Ultimately this message is meant to serve anyone reading this in the future who has suffered from this fault and needs a base as to what to expect both in terms of service received and price to be paid. It's also worth noting that at any point VW could decide not to offer 100% parts and this could have a drastic affect on this price.
In hindsight after the 2 weeks of stress and worry I have gone through I would of replaced the tensioner however for me now I feel happy with a new engine for £675 which is only a little more than changing the tensioner would of been but I wouldn't gamble on this outcome for there are so many variables!
I aso must say the customer service i received during this issue with VWUK and the dealership has been really good and they have gone out of their way to keep me updated which I think says a lot for VW so thumbs up from me

They have restored my faith and put the Mk 7 R back on my radar...
ps. anyone in the NE seeing a white GTI being drivin spiritedly ... its only me

Thanks for all the replies during this, now we just got to wait until the next one goes which I hope never but I'm not holding my breath.