http://www.direct.gov.uk/en/Employment/Employe es/StartingANewJob/DG_10026703
As I understand it, who you nominate as your referees is your choice, it wouldn't be unusual for someone still in a job not to nominate their current employer but a potential employer may still wish to contact your former employers to confirm you worked for them in which case you can give the contact number for the HR/Personnel department.
Is there someone else in a senior position in your last job who would be willing to act as a referee? Did your manager have a deputy or did you have any contact with your manager's supervisor?