The law is not restricted to just material illegal to publish
"According to them, the extreme porn clauses of the Criminal Justice Act (s. 63-66) were about catching material that originated outside the UK that could not at present be prosecuted under the Obscene Publications Act 1959."
I.e., "other countries like the USA don't share the UK's prudish views on what adults should be allowed to see, so we need to put them in prison for their own good". Right.
Note that the law itself has no requirement that the material be illegal under the Obscene Publications Act - the Government specifically refused to add this clause. Elsewhere, they say "we believe" that it would only cover illegal to publish material ( http://news.bbc.co.uk/1/hi/uk_politics/7682319.stm ) - i.e., they think, but they can't be sure. Since they wrote the damn law, why not make it explicit rather than having to rely on "we believe"?
And even if it is illegal under the OPA, why are we still worried about this Victorian law? If an adult consents to making or viewing a fictional image in the privacy of their own home, why should that be illegal because others deem it to be "obscene"?
Extending publication laws to possession is a huge step. It's one thing to put extra burden upon a publisher when publishing material - it's quite another thing to put a burden upon anyone browsing the Internet, for every image they might stumble across! A publisher can seek legal advice, or submit the work to the BBFC. Do we now need legal advice to browse the Internet? Should people's private videos that they make of their own acts for their own amusement need to be submitted to the BBFC?
Another problem is that if possession is illegal, you are committing a crime as soon as the image is made. So you can't consult the BBFC even if you wanted to, because you'd already have broken the law if the image came under the law!
There is also the point that if a country temporarily has draconian laws against publication, that simply means the material can't be published for the duration. But draconian laws against possession means that the material can't exist at all - it has to be destroyed. So even temporary laws on possession have a permanent effect.
Far greater consideration and evidence must be require for any laws on possession - and for "extreme" adult material, supporters of the law have presented none.
"Safeguarding children"
What do children have to do with this? The law is about private possession, not publication.