I have a very overweight Shetland Sheepdog, she weighed in at 11.6kg when we first got her and apparently the ideal weight for her breed is 6-7kg.
I am working to get her weight down and so far she has lost about 500grams in the past two weeks. She is very unfit as well as fat so her exercise can't be too strenuous until she builds up a bit of muscle as well.
250grams a week seems slow progress to me but I really have no idea, can someone advise me on a sensible weekly target for a dog of this breed and current weight? (11.1kg)

I honestly think that the weight loss you are getting is realistic for your aimed for ideal weight.

I have had terribly obese dogs dumped on me by owners who said that they couldn't say no to their dog! 

I have got weight off them by reducing gradually, and they do seem to be healthier doing it this way, rather than an all out starvation diet.

Look at it this way.  The docs say we should aim for 2lbs a week weight loss to diet healthily.

Would your vet give you a taylored diet plan for her? Our vets have a weight clinic that would do this for free.
Also, has the vet given her a clear bill of health, and made sure she is not suffering from any medical problem that could be contributing to her weight (as she was allready over-weight when you got her, you only have the last owners opinion as to wheather she has gained weight without being over-fed or not), just to be on the safe side?

All that aside, weight loss is weight loss, better slow & steady :)

I was advised that my collie/retriever cross needed to lose 6 kgs and the suggested time frame for that was 6 months - if this helps!

I took her to the vets for an MOT the day after I got her and apart from a couple of sebaceous cysts she got the ok. I'm pretty confident her massiveness isn't anything underlying as the previous owner told me the dog didn't get walked and when I asked how much she was fed they said they filled her bowl every time it got empty!
The vet told me to feed her around 70-80g a day of food which I have been sticking to. I take a little handful out every morning as well to keep in my pocket so she can have something when the other dogs have a treat so she doesn't feel left out, or to give for training treats so she doesn't get any unneeded extras.
Thanks for the reassurance, I guess getting her to shed half her current body weight isn't something that can be achieved swiftly :)

500g in two weeks sounds like rapid progress to me, at that rate she'll lose 2Kilos a month!   Thats quite a bit for a dog that size ;)

She didn't get to that weight in a couple of weeks, so it will take time for the weight to come off :)