End of deposit/end of contract?

one of the three tenants at my flat has said that they wish to return to their native New Zealand. At this point they will be three months into a standard AST. This tenant is also the Lead Tenant on a deposit held with the DPS.

I have spoken to the DPS and they have said that we will have to repay the deposit entirely before establishing a new one with the remaining tenants, plus a new one.

My question is whether I have to dissolve the present AST and start again or not? I guess, in the past, we would have got tenants 2 and 3 to sub-let to the new tenant but this looks to be less viable under this system.

Your advice greatly appreciated.