This did work and stopped working a number of weeks ago. All options are correct in dashboard>options>discussions and I had made no changes other than enable some server side spam protection on my hosting account. My host has checked logs and nothing relating to the missing wordpress messages are being filtered.
Its difficult to realise when the problem started but I had sometime earlier (in my mind before the problems started) upgraded to 2.2, added the Glued Ideas- subtle theme and added the sidebar modules plugin. I have since deactivated the sidebar module plugin and applied the default theme and it made no difference.
I'm not sure how to go about finding where the problem lies.