Thanks - you are right it does seem to be something to do with the themes, but I cannot understand what is happening.
Default theme is twentyten. If I create a new account, and then visit it, the site is blank. If I activate another theme in admin, the blog loads, and if I then reactivate twentyten it it displays fine.
I have setup debugging as expained in the codex - no output, and checked cpanel server logs - nothing logged. I have also defined the default them in config just in case, but it made no difference.
So its something related to the theme and new accounts, but there is no information telling me what is happening.