That really sucks, Have you gone to talk this through with the citizens advice bureau. They are usually pretty clued up and can give free advice. A lot of them are lawyers or accountants and so ideal to provide some tips.
Ive often found that in these situations companies / lawyers send out really aggressive letters making people panic into paying. As long as you maintain communication with them and express your concerns they will normally resolve them satisfactorily. Just dont stick your head in the sand on this one as that is when they go for the throat
Good luck sorting it out, not a nice thing to happen especially when it is not your fault and hope the CAB can help