Problem found, I hope!
Spoke to Worcester's technical helpline, and they assure me the diverter valve is at fault. The pin that operates the micro switch is not moving out far enough when taps are turned on, and if you operate the switch manually...hey presto, the boiler fires up for hot water.
I've been told that the diaphragm can be repalced and due to cost, i'm leaning towards this. Is that wise?
My dad still thinks i should just get a new boiler, but i think thats way over the top