Quick Update:
Having flushed through the entire system we have found the following...
1) The radiator isn't blocked
2) The thermostat works fine
3) The way it was filled meant there was probably a big airlock.
So after trial and error making sure that we could fill the system and bleed it properly, the system was emptied and filled with the correct anti freeze - water mix and bled.
Yesterday when I took it for a run the temperature guage was behaving itself, there was no white smoke to speak of and it didn't lose any coolant.
Only time will tell (will take it for another run later) but its looking faily likely we may have finally cracked it
Few things to do like just adjust the clutch (bite is at the top of the throw) and wear the brakes in but apart from that shes about ready to stick through her MOT
The only thing i would be slightly worried about is if shes burning a bit of oil, theres hardly any smoke to speak of so hopefully it will be totally burnt off soon.
So close to getting her back on the road
Once shes on the road the real noticable improvements will be made (Alloys refurbed, kit fitted, repray, vinyls etc etc)
Finally feels like some temporary good news