Correct me if I'm wrong here, but how I read the above chart is that the smallest denomination he could use and it have to be accepted is the 20p coin, since the debt is £10.00.

Yes, the suggested split keeps those individual amounts below their individual limits, but the total debt of £10.00 is what's being paid, not 4 separate debts of £0.20, £0.20, £5.00, and £4.60.

At this point, however, I think you've wasted far more time - and suffered far more frustration - determining how small a denomination you can give than will be inflicted on the recipient by being handed either assortment of change.