...I think the big positive is that both business models are different enough, one is strictly online shop, the other is a shop with online shopping cart...I can take some comfort in that.

If they do find out, which they will eventually they might be annoyed but I can only stress the difference in both business models and ultimately my policy of strict client confidentiality.

I forgot to mention that I did try to warn the 2nd client, albeit indirectly (I only just remembered!). My advice to them was to contact their local enterprise board and ask for advice on any potential grants and also to help with market research.

We knew the other client had dealt with the Ent Board recently and was possibly getting funding. If the 2nd client took my advice and contacted the Ent Board they would tell them of any other local competition as part of their market research / sustainability study.

I dont think they did contact the Ent Board in the end....but at least I tried..

I think I have covered myself on this one as best as possible. Writing in the forum just helped me to get my thinking straight. Thanks for replying n3tflow, the whole exercise has helped lots!