There isn't much difference in fuel consumption between the Euro delivered m103 and the m117 that GGR suggests. I note that some say they are reliable...hmmm ,not in my experience. An M103 has an unhappy reputation for head gasket failure and the distributor leaking and/or filling with oil.Plus,in Engine terms,the M103 is getting OLD..
myself,I consider the M130 to be a good engine,only it's combustion chamber is a bit old fashioned and not really conducive to good flow.
If I were in the UK I would be seriously hunting for a late model V6 powered C series.
John Olsen has fitted one to a W111 Coupe and the results are amazing. Far better handling should be achievable ,the reliability of a later,lighter engine with less miles and better fuel economy .The latter being so important in these days of unscrupulous fuel pricing policies.
The trans for the M103 is a regular mercedes 722.xx series which can be swapped for a manual if you know anyone who has parted out W123's ,especially the W123 five speed as found in 240D's. Actually,there was one on ebay.uk just last week with a very low starting price.
A lot of folks worry(unduly) about the later model cars electrics. A lot of this can be elinated with the use of an aftermarket fuel delivery system such as the Emerald ECu
http://www.emeraldm3d.com/later automatics are electronic without the valve body which is OK for mass production methods to build cars but not so good for us who swap things around. This could be elminated by adapting a manual trans to the rear of a V6 and a bit of digging around could uncover some good trannys in the UK,e.g the landrover fivespeed and Ford untis.