| Quick update for everyone following this - and thanks again for all the thoughtful comments. Thankfully no long term damage to my pupil I think she will cope fine, now she realises it was nothing to do with her.
At first my insurance company weren't interested, they reckoned it was a Mini problem. Mini though did not want to touch the car until it was assessed by the insurance, so I was left phoning between the two all morning.
Have to say that Mini Customer Service have been great so far, they appreciate my problem with work, being a driving instructor and two people due to take their test on Thursday, so they have arranged for me to get a courtesy car with dual controls on Wednesday. Given that I was looking at having to fork out over £1000 a month for a contract hire car, I am delighted. (My insurance apparently does not cover the cost of a replacement car as it was not involved in an accident!)
Given Mini's response so far I will no doubt stick with this type of car. I have been delighted with it till now and most of the pupils love it. Jonny6 above is right that this does not seem to be a common problem and could probably happen to any car. I reckon that in situations like this the quality of the product is determined by the quality of the customer service and to date Mini have never let me down.  | 
