Thank you, everyone for the helpful comments and suggestions. It is frightning to see that the "security" bits are so easlily defeated.

I have emailed Atmel to ask about their security and not heard back yet (the local New Zealand Atmel distributor told us there were no security issues).

In the absence of a legitimate response from Atmel, I guess that the Phillips LPC764 OTP 8051 micro would be the best option here. About the same price and more/better features. This required a relay-out of our PCB but worth it considering the alternative.

Cheers,

Bert