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Baxi Combi Instant 105e - Heating stops when hot water switched on?

The central heating on my Baxi Combi Instant 105e seems to work fine until you run a hot tap, then it switches to heating the hot water and turns off the heating? Then the hot water seems to be continuously heated with no heat to the central heating and radiators go cold.
The same happens with the pre-heat on the hot water on or off.
Anyone seen this before or have a solution?
John, February 2008
sticky diverter valve

m.edwards, February 2008
link Click here to see other fixes for Baxi 105E.