OK guys, I disconnected the car battery & removed the key batteries overnight in an effort to clear any spurious codes that may have been there. This did nothing. I again re-syncronised the key, again same problem.
I took the key apart & found it has a small Philips transponder chip (13x5x2mm) just behind the infra red emitter LED. This is not connected to the batteries or circuit board in any way, so I am assuming it works the same as most other cars & simply sends its static I.D. to the ignition lock pick up coil when the ignition is switched on. Also, the only place to get a new key is MB, whereas most other manufacturers keys can be bought & programmed from any good locksmiths if you have a working key, or programmed via the car ignition switch. This would mean there is no facility in the car to reprogram or resync the chip, so the re-sync process does nothing for the chip / immobiliser, but simply aligns the infra red signal between the key fob & the central locking / alarm unit. OR IN OTHER WORDS, if you were able to totally remove the alarm / central locking system, the immobiliser would still work, as it is a separate circuit / system.
I cant work out why no one wants to program a key. There are keys in locksmiths around here with a flat bladed key & transponders built in that would fit, even though they have no infra red. Perhaps MB have some kind of 'patent', preventing 3rd parties from reproducing their systems.
Am I correct or am I barking right up the wrong tree?

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The KISS principle (so who's gonna tell MB?)