Interestingly, that articles states (in the right hand box):

"If an amount is too large to be rightfully yours and you knowingly spend it, you're in trouble"

In the op's case he clearly thought it was rightfully his and spent it as such. I wonder what the law is in this case?

Whether it's theft or not comes down to whether or not you honestly believe the money is yours. The reference to the size of the amount is there because the larger the sum, the less likely it is that someone could reasonably believe the money was theirs.

In the UK (and other common law countries), there's a legal principle called estoppel which often operates in mistaken payment situations. Basically, if the court decided that even if the OP did in fact spend the money in the honest belief that it was his, Codemasters would be entitled to recover the money unless they are "estopped" by reason of the fact that he had significantly changed his position in response to the receipt of the money.

It's ultimately meant to be a "fairness" test - if you had £10,000 in your account and someone mistakenly paid you £100, even if you spent that £100 in the belief it was yours, it's hardly like your financial position has been dramatically changed in reliance on that £100 payment. Therefore, you're likely liable to pay the £100 back.

However, the situation at hand seems to be more in favour of the recipient - sounds like he did rely on the additional money by paying back some debt, and that could mean that Codemasters can't get it back (or, perhaps, only get a portion of it back).

He made no attempt to ask his former employers about it; he just assumed it was payment for his illegal hours.

It's a shame. He's getting screwed from all sides.