Thanks so much Brentonking, I did look at awocoupon as a possible solution, UX is rather clunky...
I'm thinking a temporary solution is to add module banners around the site promoting the deal with the words "dispatched with your order"
and in the basket, some text to say something like:
"If you have purchased over ££, your free product will be dispatched with your order" (also show this text on the confirmation email).
Again this isn't fantastic and is a complete work around... but we may just get away with it.
I'm speaking to the developer about the extension Bonus Items - http://www.daycounts.com/en/shop/bonus-items-for-virtuemart
- Jeremy has been really helpful and he may have a stable version for Virtuemart 2 this week (i'm keeping everything crossed).
I really do love Virtuemart but V2 is still lacking in promotions, e.g. buy one get one free etc... I'll be really interesed to see these when they are developed.
Thanks again for your help...