I bought my used Fabia in November last year and this weekend noticed water in the rear footwells, contacted the dealer and they are saying it is not covered by extended warranty. Is this correct?

Probably, most extended warranties aren't worth the paper they are written on.

The dealer did say that they will ask Skoda if they will pay something towards it.

I'd let the garage phone customer services but also phone them yourself the bloke i spoke to ( Paul) was very helpful. If you bought your car from the Skoda network and have a full service history then they should help you. The garage want the business so be careful letting them phone customer service. I does depend on how old your car is too. Skoda tend to disown their fleet when the door seals go.

The car is 4yrs old in March and as a full Skoda service history.

Deffo ring up mate but be quite relaxed when you talk to them . I tried quoting the selling act and got shot down.