Hello All
After a lot of playing I have solved the problem, its an unusual one that I can only say relates to this one type of relay.
No it is all down to wiring it up like you were supposed to do.
Then wiring diagram was for illustration purpose only it was the first time I had used fritzing.
The circuit was already made on strip soldered board. (it was not wiring).
Ok as I mentioned I used a 20k pull up resistor across the relay 5v and signal pin with is across it held the relay off (HIGH) until the relay signal pin was connected to the Arduino then it activated on (LOW) even though the channel was HIGH.
After a lot of metering etc, I found the PSU was outputting 5.2v and the Arduino even though was being powered with 5.2v only had a channel high output of 4.6v maybe due to losses in an aftermarket uno.
Giving 0.6v loss the same as the relays onboard transistor triggering voltage.
So to fix the problem, I kept the 20k pull up resistor between the 5v pin and signal pin but then put a diode inline with the signal, blocking the 4.6v from the Arduino (holding the relay High) when the Arduino goes low the relay activates as expected.
After buying some relays of different makes I found this problem was only relative to this certain type of relay and not to others, strange.
Thank you to everyone for there input and support ideas very much appreciated! 