I don't understand those comments about there apparently being lots of room for bike and car. What is it about the legally unambiguous sign, "Give way to oncoming traffic" that you don't understand?
The driver didn't have any right at all to ignore the instruction and the possible amount of room has no relevance whatsoever. You are also assuming that this particular pillock would have sufficient judgement to squeeze past the rider without putting him at risk.
Having faced that problem on Middleton Road in Morley on a fortnightly(ish) basis before I retired from daily commuting, the OP was perfectly correct in what he did. One driver tried it on 3(!) times and I always refused to give way. On the third time he failed to notice the police m/cyclist in his rearview mirror while screaming obscenities at me. Ho, ho, ho.
Officer beckoned me over, made him pull into the side and lectured him at some length, told him he would be recording his reg. no. on the police computer and instructed him to apologise to me. I accepted the apology, smiled sweetly and said that I was glad he now appreciated how cretinously stupid he had been.
I then said goodbye to the sergeant I had recently spent the day with as we trained a bunch of PCSOs in the arcane arts of cycling safely in traffic and went on my way thinking "There may actually be a god, after all".