I Upgraded iCloud but Photos says "Not enough iCloud Storage"

I am using an iPhone 7 with iOS 14.4 and I've recently started doing more video recording during Lockdown in UK. I already have a large photo library built up over many years (nearly 14,000) but I've recently added more videos and I'm up to 195 videos. This morning I got messages that it could no longer backup to iCloud because there was not enough room (I was using a 50GB contract) so I upgraded to 200GB but Photos has refused to recognise the space either on my Mac or on the Phone. Turning the iCloud storage off/on on the Mac sorted that problem but it is not so simple on the phone!

If I try to turn the iCloud off for Photos on the Phone I am presented with the option to either lose or else download the photos that have been "optimised" – a cool 4,400 photos. With slower rural broadband that is going to take an absolute age !!!

Is there another way to get Photos to recognise the storage I have purchased?

I have already tried repeated shutdown/restarts of the Phone, as well as forcibly removing the open Photos app (by flicking it upwards).

Help or suggestions please.