I have finally managed to establish what has been happening! Can I first of all thank everyone for their input, it was very much appreciated.
Upon cloning the suspect drive I compared the online activty with another PC. The suspect machine was still storing cached web pages as .txt rather than .htm, which the other PC was doing.
The I.E addons were disabled and straight away the suspect machine began behaving normally. The culprit addon was eventually identified as the "Sophos Web Content Scanner". When switched off the web pages were cached as .htm. When active they were cached as .txt.
thanks again.
Dean
Good find, and thanks for letting us know.
Cool. More information about the Sophos Web Content Scanner can be found here http//
Once malicious content/code was blocked, "the plugin attempts to preserve as much of the the look of the original web site as possible, thereby providing much of the original browsing experience".
Thanks for the information.