Thanks Mohamed. I have had a look at that thread. It suggests enabling the Debug mode which I have done and generated a log file. Like the other thread it says I have [charset] => windows-1252 but like the other poster I haven't changed anything in the site. Could that be the problem? I had a look on the Paypal dev site you linked to, but couldn't see anything about encoding on there.
The end of the log file shows:
HTTP/1.0 302 Found
Location: https://www.sandbox.paypal.com
Server: BigIP
Connection: close
Content-Length: 0
invalid response
Is there a way I can send you the full log file as I don't really want to post it on a public thread as this is?
Thanks in advance.