I agree with the 'paying for hosting' side of things and have already suggested this to him. To be honest I prefer to set up hostings, makes it easier for me to admin, and use scripts and PHP etc. I have extolled the virtues of a small fee per month but its a no-go.
I'll give it another go, as I'm seeing the client later to review the site, but as he rightly states the free space isn't really free is it! it comes with the deal. I can see both points of view and while I think its a good idea to stop these scammers the little man always has to suffer.
I still really can't believe I can't upload from my PC. I do some small personal websites for people and quite a few use NTL but I've always sent them the site zipped up for them to upload via a browser.
Still just means i'll have to charge NTL clients a bit more for the extra hassle.
Saying all that I see a business opportunity here and am going to look into web hosting for people on NTL and the like that want business websites.
Hey I could be on Dragons Den soon trying to explain why I need £250,000 and how I have valued my new company at £1.5million even though I have no assets lol
PS: many thanks for the input guys and girls very much appreciated, at least i know what i can do now.