A similar issue and outcome is discussed here:
http://forums.moneysavingexpert.com/...html?p=4076068

Apparently this little bit of verbiage on the Ryanair site is what they can rely upon, given the original poster was not born in the UK:

A valid European Economic Area (EEA) driving licence with photo, presented by a passenger whose place of birth is within the EEA is acceptable only for travel on internal flights within the UK, internal flights within Italy and UK-Republic of Ireland-UK.