HI Michael,
Thanks for getting back to me so quickly. Yes I agree, I think it is a user issue.
I searched the boards after posting and I found a thread that I think has solved it.
I made a new project and set the sequence to DVCPRO HD -720p@25fps and then tried a clip again. The clip filled the canvas screen without any black bars so i copied the 1st assembly (At the wrong settings) into the new project and then under EDIT clicked remove attributes, highlighted distort and motion and OK>
The project has now lost the bars and is looking like 16.9.
Thankyou once again for your time.
Best
Donna