First off thanks to everyone who has offered advice, I know have a new spanner that is much better than the C spanner, I have found the indeed the tightness of the nuts that secure the chuck to the backplate can make up to 5 tenths difference and I have learned a new technique. Tighten collet chuck to bar to check the back of the chuck is square to the taper.
Sadly all this I am slowly losing the will to continue (not really, but if i had enough hair i would be pulling it out)
I started again from scratch. but i also skimmed the back of the chuck on advice from RDG. Unfortunately this has not made any real difference.
But what i have noticed is when it is all bolted up tight with hardly a flicker on the dti at the front of the taper the back of the taper and the face of the threaded spigot have up to 1 thou runout.
I have uploaded a short youtube video (32 seconds) to show the measurements
Do you think the chuck might be faulty or is there something else I can try.
Once again really big thanks for all you help