Could be missing something but believe the solution was:
"So the solution seems to be to remove an old Google Account that was 
configured with a(n application-specific) password and add a new one with 
OAuth2 using your regular password (+ phone code) and allowing Ubuntu to access 
your account."

If so, doesn't that imply that a user would be forced to set-up 2-step
verification if they were not using it already? What about users that
don't have a phone to use with 2-step verification? From the
instructions on Google, understand that you can generate an application
specific password for Ubuntu and not require a phone, but what about
other applications that involve a Google account; would you not require
a phone for those?

Is this a correct assessment - if not, please could you expand upon the
solution?

For info: 
* Removed all accounts, checked seahorse and ensured any stored information was 
removed.  
* Re-created the Google account only. 
* Seahorse stores two entries, one containing the account password (right click 
> properties shows "signon-type: 1"). 
* The other entry appears to be urlencoded (right click > properties shows 
"signon-type: 3"). 
* Unable to see from seahorse source code where signon-type is returned from or 
what it suggests about the data stored (not a programming expert, did find the 
approximate place in seahorse-gkr-item-properties.xml where the graphical 
elements are defined, cannot see where the application gets the data though).
* Have attempted to urldecode the information stored, wasn't able to do this 
completely cleanly, and due to security concerns will not paste the whole 
string into this comment. 
* However, basic layout of data stored appears to be: 
Tokens<random_string>.apps.googleusercontent.com timestamp Py refresh_token 
Token <random_string>Expiry

A little research suggests this data may be being stored for use when creating 
an OAuth token, see also:
http://code.google.com/p/google-mail-oauth2-tools/wiki/OAuth2DotPyRunThrough

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https://bugs.launchpad.net/bugs/1069531

Title:
  Cannot login to Empathy after setting up Google online account

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