My problem with the '****e' explanation is that it's applying Midlands pronunciation to Southern speech, it was always pronouned as in 'kit' not 'kite' until about 10 years ago.
And lighting a match in the loo to get rid of unpleasant odours has been something people have done for a long time (in the assumption that the flame would burn off the 'gas') it doesn't work, but people still do it.
Edit : Just spoke to Mum about it, she's not sure, but it was something to do with lighting the Mantle-lamps in Portabello, it basically means, 'Get a clearer look.'.