For anyone suffering from the same problem; I’ve found a solution for consuming the web service as a Service Reference (WCF). The BasicHttpBinding.MessageEncoding property needs setting to “Mtom”.
Here’s a snippet of the required config setting:
<configuration>
<system.serviceModel>
<bindings>
<basicHttpBinding>
<binding messageEncoding="Mtom">
</binding>
</basicHttpBinding>
</bindings>
</system.serviceModel>
</configuration>
Edit: If you are having the same issue with a custom binding please refer to the answer from @robmzd.
I still haven’t found a solution for consuming it as an old style Web Reference yet.