Is it possible to set up a Vigor 2850 as an access point? If so how do I go about this? Any help would be appreciated...

Just turn off the router's DHCP and make sure it doesn't conflict with the IPs on the rest of the network, then connect its LAN ports to the rest of the network, anything connecting to it wirelessly will get an IP through DHCP from the main router instead, so it's effectively an AP.