OK so sussed out what's gone wrong, the housing with the plug is for the immobiliser, glad I didn't start disconnecting and playing around with it !!
So a cable runs from the gear selector mechanism to the ignition barrel to stop the key coming out other than in P or N. Seems like something has gone wrong at the selector end and when it works to stop the key coming out it wont then release the key. Don't know what gone wrong as it looks a bit of a nightmare to get at. So disconnected the cable at the barrel end which was easy, just pushing a tab in and pulling the cable assembly out.
Gotta love getting my head around XC 90's
