work permit and claiming tax credit & child benefit,HELP

Hi all, I need help. We are applying for ILR in June but just realised that we shouldnt have claimed for child tax credit or child benefit. I filled in the forms after recieving them in the bounty pack after having baby in uk in 2008. I just called the HMRC and told them that actuelly we shouldnt be recieving these funds for the past 2 years and if we could please cancel the payments asap and let us pay it all back. Thay said they will hav to investigate. Ive recieved a form to fill in and now they want our passports and any home office documents!
I honestly didnt realise that this was public funds and thought every child born in the uk would recieve this. I know of other people who are in the same situation with the child benefit but are very sure they are entitled to CB. Im so worried as we've been here for 7 years already and would hate to have lost out on ILR. We are willing to pay back every penny. Also would this show on the system that we were recieving these funds even if we pay it all back? we hav no idea how the system works, please help!!

Talz, what is your nationality, and the nationality of your spouse?

Also, if either of you worked in another country, apart from that of your nationality, before coming to the UK, please give details.