Hyperion Planning 'Export to Spreadsheet' function failing with invalid file format.

When using the Hyperion Planning function <Tools>/<"Export as Spreadsheet"> , the client refuses to open the file with the following message:

"Excel cannot open the file 'HspWebGrid.xls' because the file format or file extension is not valid. Verify that the file has not been corrupted and that the file extension matches the format of the file."

As I understand it, this behavior is as a consequence of client group policy settings as described in this Microsoft article: https://support.microsoft.com/en-us/kb/948615#!/en-us/kb/948615

Essentially these policy settings boil down to three options, of which option 3 explains the issue described.