littleone I don't think that the puppies are cross bred, judging by the picture.
But I agree with you, I don't think they are KC Reg'd because "full pedigree papers" usually means just pedigree papers which show the 3 or 5 Generation Pedigree. If puppies come with KC Reg the breeder will normally say that because it's pretty important, especially since the breeder will pay money to register a litter.
I agree with Ladybelle too, I think a good breeder wouldn't breed from a 3lb female, the female should always be larger than the male. Ideally she should be 4lbs or more, the male can be any size.
That puppy is very cute, but even if I had that kind of money I wouldn't indulge that person's greed, not for a non-KC Reg'd dog. Pedigree Papers are all good and well (that's all Lexi has) but for £1400 you should definitely be getting KC and some champion blood in there!