Thanks for all the replies, I am now thinking of appliqué but would like to ask Sewcrafty - what is water soluble fusible material? Would it be the same as using an iron-on backing to fuse the cat to the backing fabric?
Thought I might appliqué, quilt, then make tea-cosies etc! All suggestions welcome!! We have a Christmas present list with kids from 6months to 94 years (my Mum) to buy for, so it should be home-made for all from now-on!