Bought a USB optical mouse, just set it up and everything is working fine. Done a few tests and the problem still exists with the PS/2 mouse on P1. I can leave the old PS/2 mouse plugged in to the KVM switch (which in turn is plugged into the PS/2 port on P1 for KVM power) which works fine as the mouse for P2. It would seem that the problem lies with the PS/2 port on P1.
Thanks for all your help and advice
Regards
FBW