Oral Presentations as a form of assessment?

The main point of this forum entry is to weigh up the benefits / disadvantages of an oral presentation format of an exam compared with other forms of oral exams of spoken English.

Here's the background to my situation:
Recently, a debate has arisen between the language section of the university English department where I work, and some lecturers from the literature/linguistics sections, as well as the faculty administration. We (langauge teachers) are asked to test students' oral skills in English at the end of their first semester of an English Studies degree, in an official exam that will count towards their final grades. Our assessment, as it stands, consists of a 10-minute oral presentation (topic of student's choice, with some relation to the English-speaking world), followed by a 5-minute Q&A or discussion on that topic and possibly some general topics, loosely related to the student's chosen topic. The examiners are two native-speaker language teachers of English, usually one American and one British, and noone else is present during the examination (i.e. it's not a presentation within a class). We chose this format as the students have a course on 'Giving academic presentations' in their language classes of the first semester, and so we thought (think) it would be most appropriate to test them in a format that they have been trained in. However, we have had a couple of problems with students plagiarising, in that they learn by heart or read from notes information they have found in published sources (most often internet). We asked the department and faculty for support in preventing/tackling the plagiarism issues and now some lecturers in the department and higher up would like us to exchange the presentation for a classic German-university-style Q&A on a choice topics that either we or the students choose in advance, even going so far in their comments as to doubt the value of oral presentations in assessing students' communicative compentence in English.

I'd like to gather some other thoughts on how to approach this whole assessment situation:
- Do you think presentations (still) have a place in assessing spoken English?
- How do you prevent/tackle plagiarism in oral assessments.
- What kinds of topics could we choose if we followed the suggestion to scrap the presentation (bearing in mind that we have not yet taught the students any 'content', focusing in the first semester only on skills)
- Any other comments or suggestions that are relevant and interesting?

Thanks in advance for your contributions to this discussion!
Clare