Well, played about with the 2G/3G, when on 2G worked perfectly. When on either 3G or the self select 2G/3G, it had the same problem xxx8211; full bars, but does not make or receive calls.
Had 3G phones in the past, including works 3G Nokia, all work fine.
So, provided I always have on 2G mode, works perfectly in my house.
Why is the phone not realising it cannot actually make calls and switch to 2G?
As a workaround for the time being I have enabled wifi so using wifi if available for the internet, otherwise I am having to manually turn on 3G provided I remember to turn it off again!
Network is with Orange - I live in Blighty.