I had a similar problem with a 95 Rover 416- kept failing emissions check although not with such a large failure! (5%) My initial thoughts were the Lambda sensor, but thought I'd better get it checked out properly.
After completely changing the filters & plugs, 2 cans of engine flush and lots of swearing, I sent it for a crypton tune. The "technician" (and I use this term VERY loosely) assured me that it was definitely the Catalytic convertor that had gone and would need changed. =A3350 later, with a shiny new Cat fitted, it went back for it's MOT and, funny old thing, failed the emissions test, albeit with a lower CO reading than before.(4.3%) Turned out the problem was the Lambda sensor which cost =A326.95 and took me an hour to fit!!!!
Not that I'm p***ed off or anything.
Craig