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Is there anyway I can get this domain back without too much cost. What do .co.uk rules say about this?
We have the same problem with a company in Gremany having .de domain.
Nominet's excellent Dispute Resolution Service (DRS) does not recognise trademarks for the purposes of deciding UK intellectual property rights unless they are UK or European community wide registrations.
The more bullying and bombastic the reverse cyberjacker's attorney's letters, the higher the price that is likely to be demanded after they have initiated, and lost, the DRS case.
Many companies seeking to acquire domains foolishly heed the advice of greedy attorneys and go down the sledgehammer route. Sometimes a polite letter offering a reasonable sum of money to acquire a domain is by far the easiest, quickest and cheapest way to resolve the situation. Everyone wins, apart from the shysters!
This gains you protection in the sixty-something signatory countries. I do not know how far the protection extends.
If you get a good lawyer to write this it shouldn't be more than about £200 ($350) cost provided they are not in London or similar large city! Within 14 days you'll probably know his intentions. I have done this on three occassions and on all have had information taken down and not put back up.
Getting the domain back may prove more difficult but at least they won't be passing off anymore!