Unlucky Andy, but if you go through insurance, there's a high probability they will write it off! If you plan to keep it, then I'd accept the £400 cash and get it repaired privately.
write off as far as insurance concerned i'd bet
2000 S3 APY
18" BBS RSII with Michelin PS3s, 20mm H&R adapters, Relentless 3" DP and Sports cat, B5 V1 induction kit, cone filter+heat shield, Forge 007P, Awesome GTI SMF, AP coilovers, Facelift rear lights, Full Powerflex poly bush kit, R32 Rear ARB, SAI delete, N249 by-pass, Upgraded Engine mounts with Polytek, Stage 1 CC at Badger 5.
good luck buddy