OK, I have it working now!
I needed to use the firmware v 3.6.6 the rst version to reset everything, thanks bab3gis.
Then doing some tests I found that not only did I need to enable VDSL which I had done before, but also needed to enable VDSL VLAN insertion tag and set to 101 as sicon said, which i had not done on my first setup.

Also, just out of interest, I setup the Draytek 2850 to use WAN2 (ethernet port4) with the OpenReach box acting as the DSL modem and this also worked.

Thanks everyone for your help.