I would like to thank you all for the good advice. One thing I forgot to correct is that the replacement spindle was a second hand one and with a laser shining on the spindle and can see that the replacement is also out.
In an act of desperation I re fitted the chuck and put a gauge bar in and then with a new tool put a mark at the highest point then with the assistants a peace of oak and a 1/2lb hammer gave the spindle a smart crack. I then spun the gauge bar again and to my amazement the high point had moved and was worse.
My next idea is to look at the adverts for someone who could make me a new spindle out of better quality metal or buy a new lathe.
I am now going to console myself at the Malpas Steam rally just up the road in Cheshire..
Once again thank you all for your help and advice.
James