You are right joebloggs. Mark and I had a look for technicalities on hmrc and found these link. It says there in black and white the I'm excluded with the rules.
http://www.hmrc.gov.uk/manuals/cbtmanual/cbtm10140.htm
Anyway, we will write the caseworker at Solihull a letter explaining about this and then since it can take up to 21 days for the child benefits to update and confirm it in their system, we will include in our letter that to satisfy the caseworker's who is dealing with my ILR application, we have indeed changed the payee of child benefits to Mark's name.
With this, we are considering of claiming child benefits of my other children as well in Mark's name.