Clodagh
Playing chess with pigeons
Which is pretty unfair whenYou haven't got a good case for mis selling as the breeder has offered mediation. You mention the breeder is prolific, assuming you did check the breeder is licensed before buying the puppy, you now need to contact the licensing authority and make a formal complaint to enable them to investigate all aspects with the potential to reduce the level of licence the breeder holds.
A. Presumably the OP was entirely happy with the breeder when she did her pre purchase investigation and
B. The breeder has offered repair or replace both of which OP has declined.
As I see it OP wants to keep the pup, get £600 gifted to her and ruin the breeders business.