I had my A4 serviced and MOT (no advisories) end of December, but the garage pointed out oil in water but no water in oil. They suggested oil cooler needed changing but could not do it until after new year. New year came and I had a trip pencilled in for 7th Jan. my garage could not fit me in until after, so I entrusted it to another garage. After its service it was running fine and showing no problems. I told 2nd garage to save oil if not polluted as it was £50 2 weeks ago. They changed the cooler but told me the engine seized after running literally seconds, saying there was water in the oil and implying that I had said Do Not change the oil. As the car was running sweet as a nut when I drove it there and now has a seized engine which they say they cannot fix but have offered a discount on the "repair bill".  Any advice welcome.

Sounds like to me you're in a jam. You have to at least prove they broke your car if not than you might have to settle for the discount.