Selkie, I think it would be a shame if you gave up and just ignored the issue. I completely understand what a pain it must be to be caught in such a power struggle, but it seems unfair for your daughter to be punished for speaking English correctly--in English class.
I am no expert in these matters, but I remember from Dale Carnegie's "How to win friends and influence people" the trick of persuading people by getting them to say "yes" to things.
So maybe you could bring the teacher around to the same side you are on--i.e. the side of correct English--and sort of fade out the issue of who is right/who speaks better English/whose decision it is, etc.
If it were me, I would say something like "You are obviously someone who cares a great deal about the English language, and about learning to speak it correctly. And how long did you study English? Wow! 15 years! That is incredible--you are quite the expert [obviously you need to be a little less ass-kissy]! Now, I am sure that you want the children [or better: pupils] to learn proper British English, right?" (Teach says yes). And you are an expert in that, right? (Teach says yes, feels proud of accomplishments). So, if the goal is to teach the kids proper British English, which is of course a very difficult language to master (Teach says yes, feels superior), and if we were to find a mistake, then that would have to be corrected immediately, right? Say, a mistake in the book or something?" (Teach says yes).
THEN you have to find some sort of other authority that proves it is wrong! (because it obviously is) And maybe you could even call your own judgment into question, so that you are both on the same side, you know?
On an aside, I think I came up with another explanation as to why it is wrong: the present progressive (phone is ringing) is used to describe actions that are ongoing, i.e. actions that are in progress and extend before and after the time at which they are uttered.
Therefore, if an action started beforehand, then it cannot begin after "suddenly". You have to pick one or the other: either it started "suddenly", and then you use that to mark that it just began, or it was ongoing, and then you use PresProgressive. But you cannot mix and match.
Longest entry I ever wrote :)
Good luck with the whole thing. If you can solve it, you are a genius.