Child registration born abroad to british C

[Sri2011]

Dear all,
My husband is a british citizen by naturalisation{Date: 20/04/2005). I was on ILR when we left UK in oct 2005.
We had a baby boy in Nov 2008 and registered him as indian citizen.
We are planning to come back to UK in 2012.
But we came to know from one of our friend that he is british by birth.
My question is:
Our child is born after 3 years since we left UK. I am confused abt 3 year reckonable period here? Is he not eligible to get registered as british due to this long absence from UK?
If he is eligible, should we apply for ILR first and then apply for BC while we r in england next year? Some one suggested this, as this makes his children british by birth born outside UK. It it true?
I welcome your valuable suggestions. thank you all

[vinny]

Child is British.