Logo design, copyright ?

[Geraint]

I recently designed a logo for a company. They supplied two images of poor quality which I had to re-draw and vectorize. I also completely changed the colour and added their name to it - the images now look nothing like the originals supplied as they are merged into a logo with added text.

They told me they weren't happy with logo and refused to pay. A few months later they are using it on social media and their website.

Do I own the copyright as I re-drew the images and created a logo for them?

They say they had permission from the owners of the the images supplied ( the ones I had to re-draw)

Sorry if it's a biting winded, think I make sense. Please let me know if I own this logo and if I should demand they remove it from sites etc.