I think I've stumbled across a solution to the problem....
I was locking in the worldspawn entity and it said something about "gridsize" - size of lighting grid to "X Y Z". default="64 64 128". I tried
value: 512 512 512
And it now seems to be working OK!
SuNburN, if you're still getting this problem, this may solve it hopefully.
BTW - Is there any disadvantage to having a large lightgrid as opposed to a smaller one?
Thnaks for the help Emon