All sorted!
My uncle who, put in the extensions before ADSL was common, used a kit which was basically a double adapter with a long lead for one of the extension sockets and a standard phone socket for the other, BUT he plugged both of them into 2 way adapter and then into a phone extension lead that plugged into the 3 way adapter on the master socket. So both extension sockets were merged into one cable causing the problems! Also, both extension sockets had pins 3+4 connected so I've disconnected those 2 wires and cut them off, now only 2+5 are connected!
I've split the whole spaghetti mess up and reconnected everything so the upstairs phone and router are now plugged into the microfilter which now plugs into the extension lead and then into the 3 way adapter. I've also put a microfilter on the downstairs phone now all phones + internet work!
At the weekend I'm going to go down and help him re-wire both extension sockets so they are connected directly into the master socket via the punchdown block, which I think is the better solution. So this means a microfilter on the upstairs phone and then we'll plug a microfilter into the master socket and put a double adapter on that so his phone and Sky box can be connected to the phone socket!
Seems straight forward