Thanks to you all for you replies.

My doc is endocronologist, and quite well regarded. He is not opposed to low carb (his words were that "I think that there is still a lot of misconceptions in the medical community generally, and I cannot provide a good response to why it is better for you to eat carbohydrates as a diabetic". He said that eating low carbohydrate for a while would ultimately be beneficial in terms of stabilising my BGL and losing weight.

I have an appointment with him for follow up tests (I already did the 24 hour urine collection, and am doing it a 2nd time (6 months later) to confirm the result).

I am being absolutely careful to drink at least 2 litres of water a day (8 big glasses) and avoid salt in any foods. I bought a herbal diuretic today and will see how it goes. It is suddenly quite hot in Sydney, so I will give it another couple of days to see if it gets better. I am also keeping my protein intake at around .7 grams per lean body pound (recommended amount) - that's about 100 grams protein per day.

Currently I am eating:

Breakfast:
flax seed meal and protein powder mix hot cereal for breakfast (about 1/2 cup). I estimate this is around 4 grams ECC
2 cups coffee with cream

Lunch:
Salad with tuna, ham, chicken, or lamb (whatever protein is available (about 200grams), 1/2 avocado, 1 oz cheese. Dressing is flax oil and red wine vinegar.

Dinner:
Allowed veges or salad with steak/lamb/pork.

some sugar free jello and thick cream for desert.

Occassionally (very occassionally) I might have 15-20 macadamia nuts, or olives.