Hi Graeme. I have the same issue at the moment and I'm considering replacing the diaphram that is part of the actuator that presses the microswitch when the tap is turned on.
If I take the microswitch housing of by undoing the clip to the right of it I can see the actuator rod. If I push this in and then reassemble its fine for a while but then as you say after running tap for a while its broken again. I'll let you know if replacing the diaphram helps.
I replaced it once before last year as I was having an opposite problem where the light would not come on when turning the tap, this was fixed by a new diaphram. I'll let you know.
Paul
October 2008