OK - Terrym and Valentin. Thanks for your patience and help whilst I sorted this out. I have had another chance to play today. Despite being pro, experienced, etc etc. I am guilty as charged of being a complete noob with the BSP. LOL.
Today I decided not to use MTC and instead use MC. All is good, in fact very good - it has not dropped a beat all day.
In defence, I guess I come from the old school that used to use MTC as a 'default' so that the receiving MIDI device would follow time, rather than clocks. Aye - things have moved along and of course midi clock now follows song position with bars beats and ticks. So, dusting the cobwebs off my grey matter, setting Cubase to clock rather than time code now works fine as expected. Terry - I bet that is what you had done too?
Perhaps a note in the manual is worth it?
I suppose a lot of fresh engineers, producers and composers would go straight to clock rather than time code; but us old gits might make the mistake of choosing time code, thinking it is the only one to tightly follow the song position. The best thing about this game is you never stop learning.