Well... thanks to that guide by CMA...
..the job was almost painless and took about 3-4 hours, being careful, stopping a lot for a cuppa and then other activities like nosing around in there, just out of curiosity..
The problem was indeed the cable.
Now, my heater dial felt like there was a "cable" on it (i.e. the cable wasn't snapped and that the dial was moving "something") so I had originally suspected the heater valve..
It turned out that the little white plastic clip that holds the outer sheath of the cable fixed, so that the inner cable can move in and out had disintegrated, so the whole outer cable was moving when I turned the dial and therefore the inner cable was not working the arm on the heater valve.
The clip seems to be moulded/part of the sheath so you need a new cable.
While I was there though, I did notice that the heater valve was dripping coolant. It turns out that one of the 2 screws was working loose, despite the sprig washer...
I fitted a new O-ring and tightened the screws using a spot of thread lock.. so it was handy that I had a peek down there after all.
I also re-fitted a few screws that the previous guy had left out when he obviously removed the dash to fit a new stereo..
The dash is a bit more rigid and less creaky now.
In the guide above, CMA has to undo a captive nut under the radio.. I took the handbrake/gearlever console off (4 screws, one which CMA undoes anyway) and that exposed the captive nut very well.