The first and most obvious step here is to fix or replace the cat flap as soon as possible. If the neighbor's cat can't get in, he can't spray inside the house. Do this first because any cleaning you do will just get sprayed over (Obviously, you need to clean enough that your nose can't pick up the cat pee smell).
If the neighbor's cat is the culprit, there's a fair chance your cats will spray over the top to reclaim the area as their territory. If one (or both) of your cats is spraying to tell the interloper who "owns" the territory, they will continue to mark until they can't smell the interloper.
To deal with that delightful little issue, you're going to need a black light torch to find every place that's been sprayed. You'll need to clean the whole house with an odor neutralizer, but the sprayed surfaces will need extra attention. Don't use anything with chlorine (many cats react to chlorine the same way they'd respond to catnip, and you don't need your cats associating the marked spots with getting high) or ammonia (since that's one of the major components of urine, any cleaning product containing ammonia could smell enough like marked territory to convince a persistent marker that he (it's usually a he, although females can also spray) needs to freshen up his scent in the area). An oxygen bleach (cheaper) or specially formulated cat odor neutralizer is probably your best bet - make sure you get plenty of it, because it's likely you'll need to do this several times before the problems stop. (I won't list products because I'm in the USA and you're using UK/Australian spelling, so you're probably not going to be able to get anything I recommend anyway)
Once you've inspected with black light and cleaned, wait a day or so, then get someone with a good sense of smell to prowl the house sniffing for cat pee. It's amazing the places cats will find to mark: you're likely to find the remains of marking in all sorts of odd corners.
Good luck. I've suffered through this myself, and it's not fun.
