Steve,
There is a thread on one of the ebay discussion boards that says:
"You can accept money orders and cheques in US dollars or euros and send them to Auctionpix (
www.auctionpix.co.uk), they only charge 95p per batch to exchange as opposed to an £8 charge by banks. Or pay them a one-off charge of £3.50 and get your exchanged cash paid direct into your bank account with no charge for all future money orders or cheques. You are allowed to use their exchange rate (slightly higher than usual) and then you won't lose out:"
I haven't tried this, but I hope it helps!