http://www.financial-ombudsman.org.uk/p ... counts.htm
You may be interested in the above from the Ombudsman;s website.
Unfortunately, they can close your account provided tehy give proper notice. It seems ludicrous since you aren't over your overdraft limits and are proposing a sensible route to reducing the debt but ultimately they have the right to close an account.
Still worth complaining to the Ombudsman though - their communication is lamentable and they are possibly failing in their duty to treat indebted customers sympathetically and positively.