Cannot believe how long things take to do nowadays 
It's now working as designed, having just assembler it.
That ring 'nut' was loosened using the tried and trusted method of blunt screwdriver given a couple of hefty biffs with a hammer.
Once off it revealed the key and keyway, so I gave every moving part a judicious spray of Duck Oil and left it overnight to work some magic if possible. I also pumped slide way oil into the housing through the spring oiler.
Well that overnight turned into a few days, but when I gave the spindle a twist it actually moved!
After a few revs the spindle started to spin quite freely, so I gave up on the idea of trying to remove said item.
That was two days ago, and today I put everything back, and it's now working as it should.
Two more photos added to Album.
Thanks for all the help.
Geoff – Happy bunny am I. Now where the 'bleep' are all the collets?