Ahhh As an electrical and electronics design engineer before deserting to lecture for more dosh, I believe I can shed some light on this
The problem is not a degredation of the insulation due to contact with the polystyrene but a build up of heat as there is no air flow around the cable which may lead to failure and breakdown followed by fire. The IEE wiring regs have guidance for this and if they are contravened your insurance will be voided in the event of a house fire caused by the wiring. you have been warned!!!
OK. The 16th edition of the IEE wiring regulations have tables of cable ratings with the default installation method being direct clipped to a wall. The current carrying capacities for single core twin and earth double insulated PVC cables (grey flat stuff) is as follows:
1mm 15A (lighting)
1.5mm 19.5A (lighting)
2.5mm 24A
4mm 32A
6mm 41A
When the cables are placed within (sandwiched and touching) an insulating material such as your poly, then you must apply a derating factor to them as follows:
run length factor
50mm 0.89
100mm 0.81
200mm 0.68
400mm 0.55
500mmm and over 0.5
So, if you have a run more than 1/2m, then you must use cable that is rated for double the current carrying capacity as the derating factor is 0.5.
So 6mm in place of 2.5mm for mains wiring and 2.5mm in place of 1mm or 1.5mm for lighting.
The mains should be wired in a ring circuit (start at fuse and connect to each socket in turn until you return to the fuse again) and protected by a max. of 32A fuse of MCB.
Hope this:
a is not too boring
b is useful
Cheers
Tony