There are some exceptions listed explicitly, and yes there is a 'proportionate' argument but that doesn't seem to be applied. From PSI 17/2016 (the guidance for prisons):
6.1 Prison Rule 12(1) provides that “Women prisoners shall normally be kept separate from male prisoners”. Unless there are exceptional circumstances, as determined by any type of Transgender Case Board expressly convened for the purpose of determining the most appropriate location, prisoners must be located according to their legal gender.
6.2 Women offenders who present a high risk of harm to other women are managed safely in the female estate. Transgender women who pose similar risks should be managed in a similar way in the female estate. In a judicial review of September 2009 (R (on the application of AB) v Secretary of State for Justice [2009] EWHC 2220 (Admin)) the judge held that a male to female transsexual prisoner with a GRC had to be transferred to the female estate even though one of her index offences was attempted rape of a woman.
6.3 There may be exceptional cases where it is necessary to refuse a transfer to the female estate for a transgender (male to female) prisoner with a GRC. This can only happen if the risk concerns surrounding the prisoner are sufficiently high that other women with an equivalent security profile would also be held in the male estate. If a transfer is refused, the prisoner will be a female prisoner in the male estate. She must be held separately and according to a female prisoner regime as set out in PSO 4800. This provision exists as the male estate has greater capacity to manage prisoners who pose an exceptionally high risk to others.