OP, you haven't posted their letter of refusal of informal reps, just an extract. Please post this if possible. They will have re-offered the discount, so now you have to make a decision on whether to wait for the Notice to Owner, and submit a formal representation, or pay the discount. If you wait for the NtO, you lose the discount option, but most London councils re-offer it when rejecting formal reps. On the other hand, you could well succeed and they accept your reps and cancel the PCN.
We have yet to see your reps, but I suspect they will need to be beefed-up if you decide to wait for the NtO.