Always best to use a well advertised and local company in the Callis area. I know lots of us do and have no problems.
Trite advice after the fact doesn't really help the OP.
Did they provide you with printed terms and conditions that specified exactly what they consider "driver error"? Have a look through your paperwork as there may be something hidden in the small print, although I suspect not.
Anyway, I'm assuming you paid by debit card as you stated the the money had been taken from your bank account. If you used a Visa, Visa Electron, MasterCard or Maestro debit card then you may still have some protection. It doesn't fall under Section 75 of the CCA but most UK issuers have a system in place to deal with complaints.
You must contact them within 120days so I'm assuming you're ok there.
It sounds like they're really trying it on - mechanical breakdowns happen, however to suggest that a clutch going is driver error is ridiculous. Get on to your card issuer (bank) and instigate a chargeback claim. Forget the poor customer service etc and simply concentrate on the fact that £400 was debited from your account on the basis of a spurious claim.
If it was a credit card you meant, then its a bit better as you can then claim under section 75 of the CCA.
It may end up a bit time consuming, but worth it to a) get your money back and b) possibly make them think twice about doing it again.
Good luck with it.
JF
Edit: It looks like Economy Car Rentals are just another agency, like select. Do you know the name of the local company who actually supplied the car? Or is there a different Economy Car Rentals?