Hi Guys, lots of feed back thank you.
Some feed back from me.
As far as I can see non-room sealed instantaneous water heaters are allowed by BSS for the time being until something better comes along. This is because they have a good safety record. To date I have not found a heater manufacturer that would approve their room sealed heater for narrowboat use. Glad to proven wrong about this. Our boat was built circa 1997 and was fitted with a central heating gas boiler.
The cupboard I am proposing would have door with a rubber seal so access would be no problem. I accept that a there will be the need to seal all the joints and holes. I was contemplating a 200 x 200 vent in the side of the boat. Should be adequate to keep the most enthusiastic spiders at bay.
The issue with burning LPG is the gradual build up of carbon monoxide in your body. Generally you use hobs and ovens for a short time and hence not too much of a problem, Whereas water heaters can run for some time and use a lot more gas. Evidently carbon monoxide stays in your body for up to 4 hours so if you are not careful you can keep topping it up until it reaches a dangerous level. I don't know anything about RCD or RCR perhaps someone can point me in the right direction to read about it. It has been good to have your comments, my next move is to find a boat registered gas engineer to get their advice on the installation.