The small gourami died a few minutes ago. The hiding log intervention was a good one and I should have thought of it sooner but inevitably the small one wasn't going to stay inside permanently; by this morning, every time the big fish wandered off the small one was venturing out and trying to have a swim around and eat something. And then of course it had the sh*t kicked out of it and it went back in the log... and the cycle repeated all morning. About an hour ago it exhibited the classic loss of buoyancy control thing and after struggling for a while it gave up.
I'm really cross with myself. This outcome wasn't inevitable and I don't care if the fish only cost a fiver. It was an animal, and it died on my watch. And what's more, the bully won and is swimming smugly around in my tank.