At Cambridge, as part of the English tripos Part I, you can choose between a paper on foreign literature and critical theory. If I'd been more sensible about choosing A-levels, and done French, I might well have applied for MML (French and Russian, probably) in order to study the literature. However, I was put off French A-level by the banality of the material studied (transport, GM crops, etc...), even if I'd have become more proficient in the language. The reason I have enjoyed studying Latin is that the language work is always grounded in literature - short stories, poems, etc..., which are rewarding to translate and understand.
I found the foreign literature option at Cambridge very enticing (I don't think Oxford offer an alternative - their English course as a whole doesn't appear as good), and asked about it thoroughly on the Open Day. The colleges provide language tutors (I suppose they're members of the MML faculty, but are organised by the English lot) and support, to get you to A-level standard if you're not already, and then up to Flaubert-standard (French set texts I know include something by Flaubert [probably Madame B, might be Sentimental Education] and Racine tragedies, which my A-level friends say are beyond the standard of their course). It's also possible to take MML tripos papers, if you want - I think you can substitute one paper, or, if you're interested enough, just do them for fun to expand your knowledge of language/literature. It's also possible to do plenty of work on foreign literature in Part II (in translation) - I certainly don't wish to narrow myself to the English tradition. In the course of doing English, you're almost certainly going to have to do the French Symbolists when it comes around to Modernism.
I'm not interested in criticial theory, much of which seems spurious to me. Various ideas can be useful critical tools, but I think that a preoccupation with schools of criticism can overshadow the literature itself, which is really what I wish to study. Other philosophy, dealing with wider ideas (e.g. Nietzsche and Heidegger), is probably more useful reading than cultural theorists, as there is more to relate to literature as an artwork. I got the impression from the DoS on the Open day that the approach you take towards the English course is open, in terms of your interpretation of texts. You can go at everything as a passionate deconstructionist (and much good may it do you!), or a feminist, or a marxist, or a new historicist or a queer theorist, and engage in all these debates... or you could respond as a traditional liberal humanist such as myself... As far as I can tell, I won't be forced to write essays on Jacques Derrida et alii - and judging from the reading list I've been sent, there is an enormous amount of primary material to get through.
Whilst doing MML will offer more immediate scope (studying two traditions), as well as language skills, I certainly don't think that by studying English you are somehow isolating yourself from continental literature. You can if you want, and miss out on a great deal ("There is no English novelist as great as Tolstoy" - E M Forster). Indeed, given the option to do foreign language work, and incorporate other traditions, it seemed to me that by studying English I would get the chance to study 'literature as a whole' (I was told on the Open Day that such an interest would probably put me at an advantage). And there remains that fact that whatever course you choose, it doesn't ban you from studying other interests. I look forward to watching French films (preferably with Audrey Tautou in) with the subtitles blocked off (I've got to work on my language more first, which I hope to do over the summer), and whilst I hope to study for an English degree (providing I get my grades, including, perversely, an A in Further Maths...), I plan to make as much use of opportunities for learning foreign languages as possible. Likewise, if you do MML, you're not forbidden to read Henry James or T S Eliot. You're probably less likely to get the chance to write about them, though, than an English student would get to include Baudelaire in an essay.
Perhaps if I'd done French A-level, I might have been better off doing a languages degree, as I could then get employment as a teacher / interpreter, though I don't feel especially drawn to either vocation. However, it's dangerous to start partitioning off your knowledge, and I certainly don't think I've limited my options by choosing English - indeed, this seems to offer a more flexible approach. Whilst it's certainly true that
if you spend your free time reading as much foreign literature as English, then the choice is much more difficult.
That you consider which you're more intested in is certainly the best advice. Languages are likely to include and oral at interview, as well as asking literary questions about the books you've said you like... Either way, you stand a good chance if you like not just reading, but also thinking about, books. And I wouldn't drop either A-level language if I were you, as I've come round to the opinion that foreign languages are one of the most important things to know if you wish to study literature.