Further update [for those kindly folks who can be bothered with this ghastly saga]
Putting the house back on the market tomorrow at agent's suggestion. Meanwhile, spoke to the notaire who confirms : we cannot back out [more's the pity]. Sellers can demand reduction but it is up to us to say no [don't worry, we have in no uncertain terms]. Spoke again to head honcho at agency, who is coming round on Saturday to discuss our options and what to do next.
Have decided in the interim that IF they don't back out and go ahead, we never want to see them again, so will have someone act as Power of Attorney to sign the Acte de Vente in ca. 90 days.
Any comments anyone? Loved the s h i t comment - just about sums them up!