Jools666, I have read the reasons for this many times, but it is hard to remember all the science involved. Basically, there are places in your body -- especially your liver -- that store blood glucose in the form a glycogen (a starch). Your liver takes in and releases blood sugar every day. As the morning approaches, the liver of a normal person will release sugar into his or her blood to help the person wake up and prepare for the activities of the day. However, insulin will also be released to counteract this "liver dump", as it's called, and the blood sugar of a normal person will remain more or less normal. (Why the body acts in this seemingly illogical way, I can't remember.) In a diabetic, the insulin response is impaired, so your blood sugar will simply keep rising. To stop the rise, you have to eat something or take an insulin injection (or perhaps take a dose of some medication designed to lower your blood sugar). If you eat something that has a significant amount of carbohydrates in it, your blood sugar will rise before it drops. Your blood sugar will eventually drop because eating caused a release of insulin. You see, part of the diabetes disease isn't just that our pancreases have less insulin to release, but that the monitoring system seems to be messed up. Thus, the reason your body doesn't respond to the dawn phenomenon (i.e., rising BS numbers in the morning) may have more to do with the impairment of your body's ability to monitor your blood sugar than with the actual availability of insulin in your pancreas.
I don't know whether eating something that is only protein and fat will stop the dawn phenomenon, but it should be easy enough to find out. Tomorrow when I wake, my BS will probably be in the range of 135 to 140 (lately it has been high). I will try eating some cold cuts and then test my blood an hour later. You can do that too, of course. Eating only protein may not cause an adequate release of insulin to stop the dawn phenomenon, but I don't know that for sure.
I haven't read up on the dawn phenomenon in a while, and it's possible that there are some inaccuracies in what I said, but I don't think so.
One other thing: If you ever test your blood and find your glucose inexplicably high, that may be because your liver dumped sugar into your blood. The only way to minimize liver dumps is to eat a reduced-carbohydrate diet so that your liver doesn't store up a lot of glycogen to begin with.