In the log a payment dialogue box it will always try to use the full credit to pay down any invoice, there isn't a way to only apply part of the credit. Entering a value into the amount box will also lodge a second payment to the bank to pay any remaining balance.
Can you list the reference number of the item you're trying to remove? Is it the £190 credit note (#SP001147)?
What should the balance be on invoice #001257?