What are the gotchas if any? Do I need planning permission?
Building control? How should I proceed?

Find a structural engineer (talk to the BCO for hints, if you're lucky).
They'll be able to tell you if the foundations would be adequete and how
safe it is to dig out the rubble. They will also tell you if a little
underpinning would be beneficial. You WILL need building control approval.
Not sure about planning for this.

Christian.