Well after trying the software update function via the USB drive (which worked fine), it hasn't rectified the problem and I've just emailed BMW customer services as I think this is a total farce to be honest.
I know it's a problem with my car as the function was working, and the dealer managed to get my handset to work with another car just fine proving it's not the handset.
Has anyone tried emailing BMW before? Using their contact form, I just get a 'database error'.. Googling it, I found this is a very common issue, so I found an email address for them at
customer.services@bmw.co.uk and another for
jane.noble@bmw.co.uk so I've emailed them both..