Thanks for the comments - glad at least some people can get it running!
Regarding the colours, the idea is that shooting Blue squares is immediate game over, but all other colours need to be shot for energy. The plan was that this combines with the fact that you always fire 4 shots at a time (assuming they are ready to re-fire) , meaning you have to be careful when you fire. Also, the energy cost of shooting means that you really need to hit 2 baddies out out of each set of 4 shots to get ahead.
So, just shooting lots won't get you far.
Blue squares shouldn't really kill you (they are meant to be 'friendly'), but they do. This, and the game exit upon losing were both due to me being desperately short on time to finish.
The amount of stuff moving was largely due to me forgetting how underpowered Spectrum BASIC is. If I'd realised sooner, then I'd have gone for something with less movement. There were meant to be 8 lasers at a time (1 per tentacle), and the Octopus was going to be bigger, but I had to scale that all back to make it in any way playable.
However, I'm dabbling with machine code at the moment, and I may well re-write this as my first proper project, since I do think that the core idea has potential (the multi-way firing combined with having to both hit enemies whilst NOT hitting friends).