Jk what are the legal implications if an Ad agency after not completing a deal on the commercial use of a song then create and use a copycat version.Would the creators of the original music be able to sue for plagiarism even if the chord progression is slightly different or is this situation one of those strange grey areas that has no precedent

From your description I fear it would be quite a battle (the "slightly different chords" are a disturbing phrase)... they have loadsamoney for lawyers.
Steve Levine suffered this with a copy version of Karma Chameleon in a recent ad.
It's infuriating, as Hooked and Satisfaction were for me, but I find energy is better used creating the next masterpiece.
After all, given the choice, cash or creative satisfaction, which would you choose?
If you say the first, you're in the wrong business!