Thanks, that certainly helps a lot! At least gives me some confidence to stand my ground a little.

They're not asking me to not build a website for anyone else in their field, just to not build a similarly functioning one. Basically it has a specific core feature that they don't want me to go selling to one of their competitors. Unfortunately I can't go into any more detail, for obvious reasons. However I was planning on limiting the clause to 1 year in any case; I'm still not going to go selling the idea to anyone else because I don't consider that would be ethical, but I'd rather not be tied to any indefinite agreement however specific the terms.

I thought perhaps I would transfer copyright of the layout/design/HTML/CSS over to them on completion, but retain copyright of the source, and simply license them to use the compiled binaries on a specific domain name.

It's quite frustrating because all this wrangling over contracts is eating up time, and making my day rate look even worse. However, two months was an outside estimate and if I can complete ahead of schedule then I will be doing a little better. At this stage I'd rather not walk away having already invested time, on the other hand I'm fully prepared to if the agreement isn't satisfactory!

Thanks again