I've sent this out to everyone in my email list to try and find out what it is, the suggestion which sounds the most likely has came back from a friends grandfather who says it is definitely a "clutch liner" I've asked for evidence to back this up, I'll post it here as soon as I get any.
The best story which has came back to me is this:
What you've got there is a fine specimen of a Victorian rectal plunger. as fitted to some horse drawn carriages. Known as a 'Gee' it is used when the horse slows down or becomes otherwise distracted from pulling.
Having carefully soaked the wadding in the centre section with fuel (which then runs down into the slot), the driver ignites the plunger. The flames are eventually extinguished by the thermostatic vials (based on the expansion of the mercury) when the plunger is hot enough. This is important to ensure the horse is not over stimulated causing the horse to bolt or to become otherwise unmanageable. The Gee is then swiftly inserted which generally resulted in modest to violent acceleration - depending upon the beast, chosen temperature, and depth of insertion.
When acceptable performance has been achieved the device was retrieved by pulling on the handle. Occasionally the co-occupants of the carriage, perhaps feeling some guilt, would ask the driverto 'give the horse a break'. In it's relief the horse would stop, rooted to the spot....
Horses eventually got used to speeding up when the words 'Gee Up' were uttered by the driver (who wouldn't) and this trait has been genetically imprinted on the horse memory following selective breeding of the now slightly nervous horses. Due to this imprinting the device has become largely unnecessary.
When motor vehicles became more popular, some of these devices may have been converted and used as cylinder block heaters, fire lighters, or early picnic stoves.