Apologies for the late reply. Was swamped with work in recent weeks...

Based on Peter's suggestion, I contacted the British Vehicle Rental and Leasing Association (BVRLA) and requested for the reconciliation service. BVRLA contacted the rental company, and almost unbelievably, the rental company called me the following day and offered to refund most of the GBP750 excess back to me (minus the damage and the cost of loss of use of car, of course).

I am not sure if the rental company has changed their policy as a result, but in any case they are Arnold Clark. Renters beware...

Happy ending in the end, well almost, because my third party insurer is refusing to pay me for the cost of the loss of use of car (amounting to about GBP60), but that is a battle to be fought at another day...

Many thanks for the advice in this thread.