"so long as you pay the appropriate cut to the PRS or whoever then you should be lawyer-safe..."

fair enough, and the right procedure, when covering a credited song
on a commercial released CD
[even if it is only a cottage industy/vanity publishing pressing of 500 ?]

.. but always a bit of a grey area when conciously, or otherwise,
'quoting'/'parodying'/'paying tribute to'/'re-imagining'/'evolving'/'etc'
recognisable riffs & phrases..

especially now when a scourge of ££$$$ hungry copyright protection legal teams
are proactively trawling at all levels of music production
for their next meal-ticket..

we only have to look at the problems caused to hip hop and dance
artists in the last decade or so from the advent of sampling technology..

and these are profiteering petty legal precendents that can be just as eagerly inflicted on our music world..

[UK BBC Radio 2 recently broadcast a short series on this very subject
buy i forgot to listen to any of it.. and cant remember the title]

the occasional band i gig with would be well and truly buggered
if ever we had to stand up in court to defend
the 'evolving folk process'
in relation to any of our 'origional' melodies and lyrics..