Well,

Basically they wanted the game but were willing to use it only if they were the sole owners. They had already promised the game to their affiliates and external clients and it had been 'sold'.

I explained the position, said I owned full intellectual property and they were allowed to use it but not resell it.

Conclusion - they are going to use the game but I am retaining full intellectual property. My pay packet had an extra £800 in it too as a thankyou for my 'out of hours' work.

YAY - Just goes to show, it doesn't matter the size of the company, if you stand up for your rights, you'll get your way in the end.