Having removed the ATC and investigated the end furthest from the tool holder it appears that position is detected by optical pickups reflecting of metalic and matt black tracks on a rotating disk. On my machine these were corroded / had paint flaking off.
The fix was simple, bits of tin foil glued over the corrosion on the shiny bits and black marker pen where the matt black paint has flaked off.
Be careful to ensure the fences between the optical pickups arent bent over in the process and re-assemble. Works a treat now...
Cheers
BPM