Fundamentally, no-one at DoC or at ICANN has the right to tell the UK's ccTLD operators how to operate its own namespace.
As Nominet says, ICANN's role should be the operation of a relatively simple and small database. It should simply be a technical organisation, facilitating the independent operation of ccTLDs in various countries.
Why can't ICANN get the message that it's in the business of flicking switches and making sure the power's on - a kind of internet janitor - rather than interfering with the policy of faraway countries.
NominetUK has a responsibility to develop the UK namespace in response to the needs of the UK community.
No unelected Californian quango should interfere with the how and why of the UK namespace!