Ben, if you look at the ESRI documentations/links, at the Top-Right the license level required to run each tool is specified.
Merge Mosaic Dataset Items (Data Management):
As Nidhin mentioned, this tool needs a Standard or Advanced license for use.
Nidhin is correct. You can see the license requirements from the top right of the help page - http://resources.arcgis.com/en/help/main/10.2/index.html#//00170000018r000000
Ok, the bit I'm looking at is called Item Description - I click on the bit of text under the tool name in Search. It has exactly the same content as the help but it says 'no limitations'.
Thanks for your help. I wish I could see some logic in the way Arc is laid-out.