Thanks for the advice and offers of help all! I definitely remember seeing an option to switch between dollars and local currency on the Steam client a couple of weeks ago, but that's gone now, so I guess they made local currency compulsory... I can't find a way to switch to £ either in the client or in the website. I think I'll follow aob's advice and email them, maybe they'll be decent about it...
This is all really disappointing though... Steam used to be a paragon of globalisation and fair trading, now it's aggressively regionalising its business the same way the movie industry did back when DVD came out! They had a fair and elegant business model and now they've gone and ruined it. I bet that soon we'll start seeing account scams such as people opening new accounts in regions where Steam games are cheaper, buying lots of games for the account and then selling it on ebay to someone from a region where it's more expensive. Or, even simpler, gifting games to people in more expensive regions for a fee!
My biggest worry is that, now that they've regionalised purchases, the next step will be regionalising access to games - imagine if I were to move back to Cyprus permanently and Valve decided to ban my account on suspicion that I had bought all my games in the UK to take advantage of the exchange rate and then moved to Cyprus to cheat them off a few quid!
Think I'll go over to the Steam forums and add to the noise of people complaining about their new pricing policies. One thing that I have to admit is that they've been listening to customers so far, so maybe if enough people whine they'll change it back to the way it was.
Using a proxy can get your account banned.
Oops! That's good to know, I came close to trying that last night!

Remembered how I used to be able to access Pandora using Tor and Privoxy, and the shortcuts were just sitting there on my desktop tempting me to try if it would work with Steam as well... thankfully I decided to wait till today and check the thread before doing so!
If you wanted to Paypal gift me the funds, I would "Gift" the games to your account if you like?
Thanks for the offer, I'll definitely consider it if Steam support doesn't come through!
Only way I could think of is by using something like remote desktop, that way you can log in to your friends/family members PC and log in to steam and buy stuff that way. I think that would work anyway!
Hehe, that is undoubtedly the geekiest way round the problem, I'll definitely consider it if Steam support doesn't come through - if only for the kudos!
Use logmein, much better than RDP over VPN
What's that? I'm a complete networking noob - those acronyms were Chinese to me
