Thank you to those of you who took the time to add their comments and advice to my thread.
To update you, I did contact the DVLA and they sent the forms to my dad asking for his general details and permission to contact his medical practitioners. He did sign the form himself for I did feel slightly guilty as I told him it was just a request to contact his doctor because of his age. He recently received a letter from the DVLA saying he can continue to drive for the time being whilst they make further enquiries. My mum has also told the insurance company which unfortunately also incurred an additional £100 per month on each installment.
Dad had a re-assessment this week and he has not got any worse or any better in the past six months. The doctor told me that giving up driving is always the most contentious thing a person with dementia has to deal with but it is the DVLA who make the final decision, not the doctors or the family, which is a relief to us.
So that's where we are at the moment - I will update again when we get notification from the DVLA.