Only mechanical faults covered Under Warranty ?

My partner had an old Hotpoint washing machine for about 10yrs, kept paying a monthly warranty fee (she could have probably purchased 3 new washing machines over that period of time, but thats another story).

Her washing machine finally died last year. After endless visits by numerous engineers it was finally deemed beyond repair. Yippee.....we thought !!

After much rangling she received a brand spanking new Hotpoint washing machine May last year (2011). The model is a Hotpoint WMF540.

The machine has been working fine, until this week. The main program dial has broken. It's hasn't broken off or snapped in two, but it is broken inside. It is now stuck on one program, the dial does turn round but doesn't click to select the program.

My partner rang the phone number on the nice shiny Parts Certificate slip to be told the following :-

"Sorry but we cannot confirm if it is a mechanical fault. We could send an engineer but it may cost you between £50 & £100 as only mechanical faults are covered under the one year warranty"

The nice young lady on the other end of the phone then tried to sell my partner an extended warranty which WOULD cover for such problems for 1 year.

The SALES PERSON is ringing back tomorrow to see if my partner wants to take up their generous offer of the extended warranty !!

Surely this problem is covered under the manufacturers warranty under the Sale of Goods Act 1979?

What happens if we ask for an engineer to come out and they try to say we have to pay ?

Any help or advice would be much appreciated.

Many thanks