I didn't know the British army had people in Canada. I hope you're not having to guard that whole area. I don't actually know the answer but offer the following: I have a 94 E320 coupe. A few months ago the AC was not working and the problem was traced to the AC relay, which was located behind the little black plastic cover behind the battery, just to the left (from the front of the car) of the engine control module plug. As I recall the relay itself was maybe 2 by 2 by 3 inches, or something like that. The relay receives two RPM signals - one from the AC compressor and one from the engine - and compares the two to make sure that they are the same, i.e. that the compressor is not slipping for some reason. If the two RPM signals are not the same, or it doesn't get both of them, it will not allow the compressor to go on and the AC won't work. Mine was not working - but my mechanic actually repaired it by dropping it on the ground - completely accidentally. I had not used the AC in a while and the switch had gotten stuck, and the accidental dropping performed the repair. At least this is the only thing we could figure as the AC worked fine when he put it back in. As I recall it was a fairly price little part - maybe $100.
This is not to say that your car is the same - I don't know. A more definitive answer could be derived from the 124 service CD, if you could get your hands on one, which has electrical diagrams and "location of component" pictures.
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