Thanks so much everyone for their responses.
The dog obedience training we went to was conducted by a behaviourist, she recommended that we keep up the training and socialising but not to force her into scary/uncertain situations. She said that she'd grow out of it..which she did to a degree...
After thinking about it, and everything I have seen in her behaviour compared to my other labs..I am leaning more towards the opinion that she has inherited this behaviour. She is not a puppy anymore and has been introduced to a wide range of environments (carefully and safely), animals, people etc. I dont think its normal for a dog to growl at the sight of a person 10 metres away while inside an aircon car?? Especially a labrador.
We purchased our lab specifically to show and perhaps breed later on after receiving her title and health checks were done.. but now that idea has gone down the drain because we cant show her as she wont let strangers touch her and I definetely dont want this trait passed down to any pups if it is hereditary.
Unfortunately we got burnt by the breeder, after the initial email from him saying that when the pup left she was fine and that the parents had good temperaments I never heard from him again It makes me mad when a breeder washes their hands from you as soon as there may be a problem. I have since learnt my lesson and will only ever be purchasing a pup from a breeder who has been around for many many years and is known to have a good reputation. Not old joe bloggs who is just out there trying to make a buck.