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Because a notice “from a tenant” brings the tenancy to an end (unlike a landlord notice), if you “agree” to them staying, a new periodic tenancy could be implied.
You will need to be careful not to agree to the staying but you could hold off commencing court proceedings for possession for a little while. Not sure how long a little while is but at some point, a new tenancy could be implied if nothing done for some time.
You can send this letter which will buy you a little time and confirms no new tenancy is being granted and any money received will not be rent but instead damages.