It would be quite unusual for them to issue an emergency passport which is valid for ten years. Usually they are only granted to cover the period of time that you will be away.
It appears that the passport officier thinks something funny has gone on. You can either do two things 1) Wait until the respond further and deal with what they come back with or 2) be pro-active
If you decide to be proactive then I would see a local solicitor about executing a statutory delcaration. This is a sworn document of your understanding. If you misrepresent matters or tell untruths then you could face criminal proceedings and because of this it generally carries more weight then simple conversations or correspondence.
In the declaration you can explain what happend ten years ago to the best of your knowledge. State that you did not receive the passport you ordered and had to obtain what you thought was an emergency passport (if this what you believe you did) which you have held until now. Impress upon them that you are not an expert in passport procedure. State that you reported the non-receipt of your earlier passport to the passport office but not the police and that if this was a breach of the rules (to not go to the police) then it was simply a result of your misunderstanding of the rules and/or honest mistake).
If you have no criminal record you should state this. IF there are persons willing to submit letters of reference on your behalf then ask them to do so and refer to them in the declaration.
If there are person who can remember you speaking of not receiing your passport at the time then you may consider asking them to execute a statutory declaration confriming this.
The more supporting evidence you can give the less likely they are to be suspicious.
Stat decs cost around £40-50 + Vat per declaration from a local solicitor
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