My Canon S3is has started to play up

As I zoom the lens in / out after a while it beeps at me, and a message appears on the screen saying “lens Error, restart camera”. I phoned Canon, and they said that it’s out of warranty, and to contact one of there service centres. One of them is just outside Colchester, and I was going down the A12 yesterday so I popped in. They said that they would need to replace the optical, and it will cost £122.55 + Vat
Now I’ve only had the thing 16 months, so £150 for a repair seems a bit steep, as I could get a new one for £200. Anyone come across anything like this before, or have any ideas how / if I could get Canon to pay, I know the warranty was for a year, but isn’t there other things where goods have to be fit for purpose, and there is something on how long they should last.
Ian.