Hi Stuart - thanks for the link - managed to reauthorise ArcGIS.
Unfortunately, I've waived the white flag I'm afraid! I've sent the machine for a full rebuild of the OS.
I uninstalled about 50% of my applications (major ones like ArcGIS, Visual Studio and any I could see that were developed using python, eg Inkscape & Blender), in the hope that helped. Gutted the registry of all Esri/ArcGIS keys and removed associated folders.
After a complete install of ArcGIS Desktop, still the error. I couldn't believe it!
Really appreciate your time and efforts on this. I've learnt a lot regarding the inner workings of ArcGIS! The turn around time for my machine is two days = therefore probably the best bet. Hate giving up though.
Great support - thanks.
Cheers-Sam