I have the tool set at 3x3 average and am now trying it on the default settings of Tolerance 32, anti-alias and contiguous ticked. These are exactly the same settings I use on my Macbook which does exactly what I expect it to do when cutting out.
For whever reason the problem started, it has now recitified itself.
I can only guess that the back ground was a bit grainy (stacked image) and not pure black, or I have hit a key that did something. Anyway, everything seems to be back on track now, sorry to have wasted your time.