Old woman driving a Micra, it had to be didn't it. As soon as you put someone over the age of 50 in a Micra they instantly lose all concept of coordination and turn in to a nervous crawling wreck.

For what it's worth mate as long as your insurance is all legit and declares all of your mods you should be ok as it sounds like she was totally at fault regardless of what this trumped up witness reckons she saw (or didn't).