It's difficult to tell obviously without seeing xrays etc. It sounds like there are a few issues with the leg- do you know what they would be doing for the £1.6K (
)- as a first opinion vet (ie not a specialist) that sounds steep- whereabouts are you?
Plaster wouldn't help the issue with the hip joint, as we can't really plaster up that far, but sometimes we actually remove the head of the femur to form a false joint- I've done this procedure as a salvage on cats many times, and it doesn't usually cost more than about £200, but I guess if the rest of the problems with her legs would mean she was still lame/ painful then there wouldn't be much point.
As far as the kneecap goes, again it depends on the severity of the displacement. Many cats (and small dogs) have what we call a luxating patella and do ok without any intervention.
How lame/ sore is your wee cat? To me, that's really the crux of the matter. If the leg is dragging or painful, and can't be fixed then amputation is probably a fair option, and to be honest most cats will do fine on 3 legs (our old surgery cat, Trio, was minus a hind leg and lived until he was 15 very contentedly!)
There is a "right" way to do these things (address all the abnormalities so that the cat is as nearly anatomically correct as possible, which yes, could involve various ops), but sometimes there is another way, which would probably leave the cat with a limp/ odd gait, but as long as it wasn't painful might be acceptable. It's difficult for me to assess the situation without seeing puss and her xrays, but I would say given your dilemma at the moment there would be no harm in you seeking a second opinion. After all, amputation is a last option, really, so you want to be sure it really is the best way forward. I would get a second opinion from another vet if possible- explain the situation and ask for their take on it. If, having examined your wee girl/ seen the xrays they concur with your original vet, at least you will be more confident about going ahead with amputation.
Hope this helps- it's hard to know really, and I always hesitate to dismiss another vet's opinion when they have the full picture and I haven't!! I do think having someone else have a look would be a good idea, and I hope you get a good outcome for kitkin- let us know!