After much deliberation and serious discussion as to what might be the main cause (including at one point getting out the pests and diseases book to try to identify the fungi style growth) a conclusion was made that the pots and paper underneath is just not drying out properly therefore creating an idea breeding ground for things that we don't want to be growing in the nursery.
The offending mould in its various forms
I have changed my watering technique too as the little seedling water can we have is a bit fierce and shoots out quite a lot of water. Instead, the classic thumb-over-the-end technique has been adopted. Slower but it stops water going everywhere. I am going to make my own watering device using a plastic bottle with a couple of small holes in the lid which should have the same effect as the thumb-over-the-end technique.
The trays are recycled packaging containers essentially with a few drainage holes made in them. The beans have been sown in two trays that our mushrooms are packed in from the weekly veggie box and the garlic chives are in a plastic tray that started out life as the tray in a packet of biscuits. I have a box in the cupboard which is now full to the brim with trays, yoghurt pots, milk cartons (all washed of course) and various other recyclables that I can use for the veggie garden as cloches, seed trays etc.
At last, some green to look at!