Well an update.
I confronted him with it - and was very calm about it. I didn't beat about the bush but said that we knew he had taken the money.
To his credit (I suppose) he didn't deny it and then did say sorry. Apparently it is because his money isn't enough, and if he asks he know we will say no. As I suspected. Although actually he has never asked us, and so we've never said no!
I think £50 a month is plenty - I don't expect him to buy essentials like school uniform or underwear with that money. He also gets other things bought for him, e.g. tickets to go the 02 festival last week (£55) and money to go to Wimbledon (£50 given to him by a family friend), so it's not exactly as if he's deprived of anything. He also doesn't go out a great deal normally. We are very lucky in that regard, in that he isn't going out drinking and clubbing like a lot of his peer group.
He doesn't have a job yet, mainly because he plays cricket at the weekend so doesn't have much spare time. However, this is something that I fully intend to change when we're back from holiday and the cricket season is over.
It seems as if it was just, to quote WW, 'mad teenage consumerism', and he and his mates are as bad as each other. However, we have well and truly put the kybosh (is that how it's spelt?!) on this, and he has been told in no uncertain terms that if he hasn't got the money then he doesn't go out and doesn't just expect it to be given to him.
Thank you everyone for your help, suggestions and words. I was getting a bit hysterical about it all earlier. It's a real shock when you find your PFB isn't the angel that you thought they were.
I will be continuing the conversation with him tomorrow in terms of paying the money back/reparation - as well as future consequences.