It took a while to find where I was losing fluid from as it didn't leak when the engine was off but as soon as the engine was running it made enough presuure to leak through a two or three tiny splits in the hose just where it came out of the crankcase.
OK its easy enough to replace the hose but you do lose most of the coolant which means replacing and bleeding it - what a PAIN.

I have replaced the lost coolant with plain water so I can drop it out and hopefully flush any rubbish out of the system and then of course I have to replace this with a mix of water and antifreeze and BLEED the system again. Its pretty easy to do but the only way you can tell if it working correctly is to see if the top hose is very hot and the bottom eventually gets hot, this shows that the coolant is circulating. But it seems that it takes ages before the thermostat opens and allows the coolant to circulate. Does anyone know the teperature that the themostat should open? I did about 50 miles in it today and it didn't overheat so tomorrow I shall replace the coolant with an antifreeze mixture.
Any further advice on bleeding the cooling system is welcome.