Golf 1.4 will not idle - dodgy fuel!

I have a nightmare problem affecting my sons MK3 Golf 1.4.

It was running perfectly fine until last week when without warning, it cut out and would not restart.

After changing all the leads and the plugs, we eventually traced the problem to poor fuel (Tesco!)

This was drained and the car started but although it will rev ok, as soon as the throttle is lifted it dies.

Everything in terms of fuelling and spark appears to be fine (although no 4 looks a bit weak) and it has been suggested that the problem might lie with a dodgy Lamda sensor? Could this be true? Or should we look elsewhere?