Just bought a 10 year old BMW that had an undisclosed engine issue - do I have any recourse for the £2500 repair work?

I bought a 10 year old BMW 3 Series cabriolet from a private seller two days ago. It had 74,000 miles on it and nearly full service history (missed 1 in 2013). I drove it for two days with an intermittent yellow engine management light, no smoke and oil level was fine but took it to the garage today to be safe. They think it's burning a significant amount of oil due to premature wear of piston rings or similar, with oil getting into the combustion chambers. The oil level is 3/4 full. We took a 30 minute test drive prior to purchase. The seller drove as I wasn't insured and there was no engine warning light, and no sign of any smoke. The kind of engine damage described doesn't happen overnight, yet the car passed an MOT in June with no advisories. The car only covered 3000 miles per year since 2013. Is it possible the problem was concealed for the MOT or passed when it shouldn't have ? I don't think I have any recourse against the seller, but I'm looking at £2500 for a rebuild on a car that only cost me £5000 or trying to sell it on with disclosure of the issue. I'm likely to take a hit of at least £1000 on this, what should I do? Some mechanics at the garage suggested that the car may have been 'mileage adjusted' at some stage. My HPI check came back fully clear, but having double checked the one the seller sent to me before I did my own (with the same website), hers suggests a mileage discrepancy but gives no detail on this.
Even though a DVLA mileage check (www.gov.uk/check-mot-history) may show progressive mileages at MoTs, it cannot show if the owner unhooked the odometer or re-set the mileages before the MoTs. Might simply be failing valve stem seals, which is not a £2500 job. Here's the recorded history of E90 3-Series complaints. Quite a few: www.honestjohn.co.uk/carbycar/bmw/3-series-e90-200.../
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