Thanks guys, I am fairly convinced that there are some big cats out there, as there were many owned as exotic pets in the UK before licencing laws came in, after which most mysteriously disappeared. The main theory is that they were simply released into the wild, or kept illegally and they escaped, with the owners unable to report them missing due to their illegality.
Dogs are a possibility, however generally I think most domestic dogs would have trouble tackling a sheep, as they can thrash about and would give a nasty kick/headbutt that could fracture the skull. As I thought, the fox can be ruled out and there seems to be no natural predators in the UK that could do such horrific damage to sheep and deer. One thing that baffles me though is that alot of the sheep found are only half eaten, whereas a big cat trying to keep a low profile would surely want to make each kill count, as the more kills it makes the more chance there is of being seen.
There is a good possibility that breeding pairs could have formed, big cats are supreme survivors, if they don't want to be found they won't be... I believe this is the reason for the lack of formal evidence.
http://www.ukbigcats.co.uk/photographic.asp has good photos..... the Telford brickyard one is particularly convincing.... the long balanced tail and low profile is classic of a panther - the so-called ninja of the big cats, but the lack of a scale reference is always frustrating :o(