Had a liitle look around and found that, like you say, alot of research points to no reason for continous monitoring with VBAC as the only indicator, unless your previous section was because of fetal distress.
Here is some stuff and interesting enough it says this:
"Medical practitioners are required by law to seek the consent of a patient before any form of treatment or care is administered. Often, particularly when 'routine' procedures are used during labour and birth, consent tends to be assumed rather than sought, leaving the onus on the mother to refuse...Any treatment or care given following a mother's clear refusal or in fact given without the mother's consent, would constitute assault and the health practitioner concerned would be laying themselves open to legal action by the mother."
But whilst research seems to point one way, the Royal College of Obstetricians and Gynaecologists here . But if the risk is as low as 0.03% - 0.07% seems like they are just covering their arses rather than offering any overwhelming proof of necessary continual monitoring.
Also worth noting that their guidelines, which I assume you consultant follows state that:
"Women should have the same level of care and support regardless of the mode of monitoring"
Stick that in his face! Or you could just try putting your foot down as it were.