FIXED
The 1.6v would appear to be a bias - diagnostic voltage. At the sensor, if I ground the voltage through a test light the voltage at the PCM drops to zero. My limited understanding of circuits would suggest if this was a (true) voltage the voltage would remain at this point and drop to zero after the test light bulb (load). Still need to do a little more reaserch to improve my understanding of how the voltage comes about and the enhanced fault codes as a result.
So, yes, I did replace the o2 sensor, which I should of done from the start. This cured the problem, o2 started switching and the emmissions came in line with what they should be.
Many thanks for everyones input.
Kieron