Galaxy I really think you need to escalate this issue to your boss's boss. He doesn't sound like he is handling it in a sensitive or even reasonable way. There should have been consultation with you before your t&cs were changed for starters.
I think you should write down a list of all the options that would be acceptable to you eg
- Continue to work at home
- Commute to the City and have shorter working day to allow for long journey
etc
Then go armed with these to your boss's boss (request a meeting and tell him in advance what it's about). Tell him that what they are doing is tantamount to constructive dismissal, ie they are making your position with the company untenable.
You could also try bringing into play the new working parent's legislation about flexible working, citing you being able to work at home when not on client sites as a solution that would not adversly affect their business but would enable you to continue working for them.
I would consult an employment lawyer prior to the meeting if you can. They will quickly be able to advise you of the best tactics.
Finally, START LOOKING FOR A NEW JOB!!
Sorry you are having this mare, I really feel for you as I have been in similarish situations before.