The short answer is, run the ExtractByMask tool after you've done the interpolation.
The interpolation tools use all the features in the interpolation and then clip the output if you've specified a smaller extent in the environment and most of the tools clip the output based on the mask that you specified in the environment. Mask is a post processing step in the interpolation workflow.
The reason that Natural Neighbor interpolation does not support the environment Mask is because it restricts the output to the convex hull around the input points, this is by design. The output does not fill the whole output raster and this may be confusing if the mask were automatically used.
Therefore, if you require that your output be clipped to a mask, use the ExtractByMask tool which is what all the other interpolations would do internally.
Thanks for replying to my question so quickly. I have used 'Extract by Mask' before but was trying to avoid a two step process/having to do this after the interpolation. I assumed there might have been a work around as the mask environments settings works for other methods of interpolation, but i understand from your explanation why it does not work for Natural Neighbor.