Thanks for all the help :D
Contacted VW and they have told me there has been a mistake whilst registering the vehicle, it was an import from the netherlands but was first registered in the UK. I have to take the V5 to sales and admin and explain and she said they will take the V5 get it amended and send a new one out.
However on contacting my insurance company he refused to change the car over to a GTi as on the logbook it says its a GT fsi, he contacted the underwriter (apparently) and they stated that as long as the log book matches then they wont change it, I then explained how it may look like i have modified the car and changed the engine but the guy was adamant and would not change it. He said he will put my call in writing against my policy stating that I have called up and tried to change the policy should anything happen.
I am very uncertain about this so will be getting the logbook changed and giving them another call, the info from the insurance company seems a bit flimsy.