On the face of what you say, this is likely to be unfair and because you have worked more than 12 months continuously, you could have a reasonable case to try and get the same job back, or money if you were dismissed.
What is important is that the employer must follow at least the Statutory Minimum Procedure which is explained here.
http://www.direct.gov.uk/en/Employment/Resolvi ngWorkplaceDisputes/Disciplinaryprocedures/ind ex.htm
Read it then see what you think.
If they have not followed the minimum procedure, which includes you having a right of appeal, then wait until you have something in writing that says what they are proposing to do with you, then go back and ask for a right of appeal. If it is denied, then say that you do not believe they are following the minimum procedure and you propose to take the case to an Employment Tribunal. If you are granted a right of appeal, then in the appeal say you think it is unfair because they didn't follow the Statutory Minimum Procedure earlier. Either way, one hopes they would see that they have messed up the process of discipline, irrespective of whether the initial decision to demote you was fair or not.
If they can be pursuaded to change their minds, you would probably expect to receive some disciplinary action - from your poiint of view a Written Warning or a Final Written Warning.
Then keep your nose clean for at least the next 12 months.
Note this minimum required process described above does change in April 2009.