I upgraded the rear wheel & cassette today so the drive train was 100% new & compatible....I still had the same problem - this time 8 shifter positions with a 9sp cassette.

In case it helps others, I've found the problem.

I had routed the cable round the wrong side of the fixing screw on the rear deraileur - moving the cable to the correct side of the fixing screw made the cable run much cleaner & straighter fixing the problem.

Now I can't wait to go out & try the new setup...hoping for a dry day tomorrow!