It was an expensive exercise, but I did fix it in the end. Thanks for all the helpful and corcerned replies.

I must admit that due to the lack of support I did consider not posting the final solution here, to what, after all is a strange problem.
In case someone comes across this issue, this is what fixed it:
As stated previously I setup a new installation on a different PC using W10 Home edition. I reinstalled the recommended version of M3 from the Warp9 website, however the issue previously described persisted.
I then hit upon the idea of running the commands that were generated by mach in the window showing the TAP file, one at a time, and testing the issue after each command. This enabled me to see where in the sequence the issue was introduced.
I discovered that after the M3 command to turn the spindle on, the axis would then only obey the G1 command in an increasing direction. Example G1F100Z100 - works G1F100Z0 doesn't work, although M3 on the computer behaves as if it is working.
I then disabled the spindle in M3 and restarted M3 (this last is important), the GCode TAP file was then able to be run.