First of all you should name the house builder.
Not only did they hand over a house with a potentially life threatening defect, they even wanted to override the watchdog decision. Quite frankly, if you had allowed this and someone had died, this would be a clear case of corporate manslaughter which would result in a custodial sentence.
You also have to wonder who did the Gas Safety inspection, the Warranty inspection and Building Control final inspection. How could all of these people miss or ignore it?
You can take your house builder to court and the government would appear to promote this avenue to new home buyers as no other regulations for redress against defective new homes exist.
Get in touch with Geoff Peter at
http://www.wingrovelaw.co.uk he specialises in taking house builders to court!