Thanks all who have provided hints and tips thus far,it really is appreciated.
The latest news in this saga is as follows:
Battery disconnection/reconnection didn't really make much difference but worth a try.
Bought a cheap code reader and got codes P1111 (Intake Air Temperature Sensor Circuit Intermittent High Voltage) and P1646 (O2 Sensor Malfunction Bank 1 Upstream). Note, this is less than a week from taking it to local Jag dealer who charged me nearly £100 simply to say the ECU 'won't communicate'. Grrrr!
After clearing codes, the P1646 re-appeared soon after with MIL light back on again.
Looked into various forums and found contradictory posts about which bank and whether it really was upstream/downstream etc.
Decided to look further in code reader with real time data whilst driving. Found that Fuel Systems 1 and 2 stay in "OL" mode whatever happens. Also found Fuel Trims stay fixed at 0% and both downstream O2 sensors have 'stuck' readings (for current and voltage readings) that occasionally become unstuck and then stuck again.
Checked o2 sensor fuse and relay and they are fine.
Worked out (I think) what some of the cypher language used by the code reader actually means. (had to do this because the instruction manual doesn't cover this and its taken me most of the weekend).
I think what is supposed to happen is that the after start up, the ECU causes the engine to default into "OL" (open loop? control mode i.e. no sensor feedback to make adjustments). After about 15 seconds or so, the sensors have been read and providing there are sensible readings, the ECU goes into "CL" (closed loop? mode i.e. thereafter making adjustments to fuel inputs via the injectors, on a near continuous basis according to feedback from the sensors (MAF, MAP, O2 etc.).The adjustments are called "short/long term fuel trims" and are measured as a percentage from the open loop default value and these adjustments help ensure minimum CO emission and as close to a Lambda (stoichiometric ration index) of 1.0 as reasonable.
The problem in my case is that the CO is too high (1.5%) hence failing the emissions test. Now, 1.5% would have been a good result for my old 245DL Volvo from 1980 which was permitted up to 3.5% but that old skool vehicle was designed as open loop. I thinks what is going on is simply that the ECU does not get sensible values from the O2 sensor(s) at start up and as a result it stays in "OL" mode which causes the fuel trims to stay fixed at 0.0% i.e. the ECU simply ignores the sensors and thus no adjustment are made.
So, with what I can make out to be sensible readings for Mass Air Flow, Manifold Pressure, Throttle Position and non-sensible readings from O2 sensors I have just ordered a whole new set of O2 sensors (simply can't get enough clear information about which sensor is duff).
Will post again with result of replacements.
Regards.