Thank you very much for this advice it is really helpful, I am preparing my defence reply to the deposit scheme, it has made me ill worrying about him taking my deposit, I can't afford it and I owe it to my brother who lent me the deposit on my current flat so I could move, and he has now had to cancel a holiday.
I can't believe the landlord would do this, especially as in effect I did pay my rent every month, and despite everything I kept the flat in such good condition that the first couple to see it, took it and moved in 2 days after I left. The landlord didn't lose any rent at all, then he did this to me regarding my deposit!
I now know that in fact I am liable for the carpet, but do not have to pay the interest, which everyone seemed to think was outrageous, which is excellent. I do agree that seems expensive for a piece of carpet, especially when you consider that in the whole time i was in the flat he didn't spend a penny on any essential repairs. I can't believe he would spend £300 on the equivalent of a runner.
Thanks you again for all your help, I feel a lot better now in completing the documents for the deposit scheme.