There are many causes that could cause the lambda light to be turned on. The catalyst itself could also be the problem. If its internals are loose (hit it with your fist when cold) it is likely the catalyst that is not working sufficiently.
However, if the engine still runs fine and fuel consumption is normal you could "solve" the problem by removing the kick-panel and take out the lambda bulb from the instrument panel from behind.
In the Netherlands we also have an annual MOT including a four-gases test and it normally has no problems with 960's that are modified like this.
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