It turns out that it is a faulty instrument cluster. My garage couldn't get their diagnostic tools to talk to the main car computer. However putting in a temp second hand one made everything read ok including the manic heating gauge. They checked sensors temps etc before changing the gauge and everyone was ok. Apparently it was a second hand cluster from a 3 lt diesel in my car and looks as though some one attempted to fix it and did a poor job and damaged it.
So its time for a new cluster planning to go for a new one. Local bmw wants quite a bit is there anywhere that might do a good deal? It is expensive but will be coded to my car guaranteed blah blah. Probably cost £500 more than getting a second hand one. Then paying yo get mileage fixed etc and they are notoriously prone to getting pixel damage. Unless anyone wants to donate a cheap second hand 4.8i one.

Only other issue is some corroded brake pipes. It getting a service which is not strictly due but it just needs some love and care.
quite relieved I have essentially a good car. Was a bit worried last week. I suppose it's the joys of X5 ownership.