Can anybody tell me the correct way to lower the string height at the twelve fret, when I hold down the E string on the first and last the gap at the 7th is just about as low as it will go.
It sounds like you have set relief (bow) correctly. I do it while wearing the bass by fretting at the first fret with my left forefinger and 15th fret with my right thumb, then tapping the 7th with my right middle finger.
Why 15? because my hand is just large enough to reach the 7th while fretting the 15th, and it also happens to be halfway between the first and the 15th. Frankly I don't think it matters all that much... first and last should work too.
I'm looking for the sound of the string hitting the fret (indicating that relief exists) with as little movement as possible (visible movement indicates too much relief).
Your description suggests that you're there. Good.
Since your relief is correct, the bridge saddle must be too high. Take the appropriate sized allen wrench (I think it's 1/16") and unscrew the two saddle screws equally, a quarter turn at a time.
Every time you make a change, re-tune and check relief again until you've got it right. Then check intonation and adjust if necessary, then go back and check it all again from the top. Don't forget to check pickup height too, since it will change when you lower the strings.
A machinist's rule is a handy tool to measure height. About five bucks at any good hardware store.