Perhaps you missed it but the March 2006 issue of Mojo had a special on The Kinks (and a CD bonus of people doing Ray Davies / Kinks songs).
The magazine also had an article/list named "Beyond Waterloo: The 50 Greatest British Tracks Ever". The premise was that they took 1967 as year zero (the release Of Waterloo Sunset) and only one track per artist was allowed and it had to be decidedly British!
Here is what they came up with (in chronological order):
The Beatles Penny Lane 1967 Small Faces Itchycoo Park - 1967 Pink Floyd Arnold Layne 1967 Cat Stevens Matthew And Son - 1967 Kaleiderscope Mr Small The Watch Repairer Man - 1967 Keith West Excerpt From A Teenage Opera 1967 Van Morrison Madame George 1968 The Pretty Things Sf Sorrow Is Born 1968 The Bonzo Dog Band The Pink Half Of The Drainpipe 1968 Fairport Convention Who Knows Where The Time Goes 1969 Nick Drake At The Chime Of The City Clock 1970 Vashti Bunyan Diamond Day 1970 Mott The Hoople All The Young Dudes 1972 Clifford T Ward Home Thoughts From Abroad 1973 Genesis I Know What I Like (In Your Wardrobe) 1973 The Who 5:15 1973 Roy Harper When An Old Cricketer Leaves The Crease 1975 Sex Pistols God Save The Queen 1977 Ian Dury Plaistow Patricia 1977 Television Personalities Part-Time Punks 1978 Kate Bush Wuthering Heights 1978 Dire Straits Sultans Of Swing 1978 Sham 69 Hurry Up Harry 1978 Poet And The Roots All We Doin Is Defendin 1978 Squeeze Up The Junction 1979 The Clash Something About England 1980 The Fall English Scheme 1980 The Jam Thats Entertainment 1980 The Specials Ghost Town 1981 Madness Our House 1981 Billy Bragg A New England 1983 Elvis Costello Shipbuilding 1983 Yeah Yeah Noh Theres Another Side To Mrs Quill 1985 Pet Shop Boys Suburbia 1986 The Smiths Panic 1986 The Pogues A Rainy Night In Soho 1986 Robert Wyatt Pigs..(In There) 1986 Morrissey Everyday Is Like Sunday 1988 XTC Chalkhils & Children 1989 The Inspiral Carpets This Is How It Feels 1990 The Ruthless Rap Assassins And It Wasnt A Dream 1990 Blur For Tomorrow 1993 Saint Etienne Hobart Paving 1993 Suede The Wild Ones 1994 Pulp Common People 1995 Roots Manuva Witness (One Hope) 2001 The Libertines Time For Heroes 2003 The Streets Dry Your Eyes 2004 Kaiser Chiefs I Predict A Riot 2005 Arctic Monkeys A Certain Romance - 2006
Mott The Hoople All The Young Dudes 1972 Flagging underground hipsters Mott were on the verge of splitting when their pal David Bowie - then still a one-hit wonder - suggested they record one of his songs in a bid to rejuvenate their fortunes. A rousing glam-pop anthem celebrating London's lurid lowlifes and outsiders (suicides-at-25, street girls, drag queens), Dudes was infused with an undertow of melancholy that perfectly captured the grubbiness that lay behind Britain's early '70s glitter: Mott scored a hit; Bowie soon became a glam star.
Re: The last truely British people, you will ever know
Nomen est omen - Changes would be the typical magazine choice. Or perhaps the rather obvious Ashes To Ashes. But this list contains some rather sophisticated choices which are not necessarily the just greatest hits. So I would go for perhaps too unknown but recognized as a classic The Man Who Sold The World.