I have just tried to answer most of the queries, at some length, but when I went back a page to read some of the answers my new post vanished, This has happened previously and I would like to know what I am doing wrong.
The lathe is a Clarke 300M mini lathe. I have checked the earthing of every part 4 times now and am happy that all is correct. I cannot see any signs of chaffing of any of the wiring. I had been using White Spirit as a lubricant, but as this was the final polishing fine cut ,it was dry. The only swarf that was near the tool was from this pass and was very fine and lacy. The "event" happened half way across a 1 inch diameter, so the tool was already in contact with the item. No marks of the flash were left on the item.
I will, tomorrow, stop everything and take the board out and have a look underneath. I am looking for physical signs of failure, but other than a multi meter I have no means of checking whether a capacitor is half failed, as suggested.
Keith