Thanks for the quick reply.
We took the clone and created the Virtual Machine. On it not working, we deactivated the license on the physical box, requested a licence reset and tried to activate this on the Virtual machine but it is failing. Starting license manger it says ‘there is a problem with your licensing system’ (this is even after a reinstall of the software – which does not look like it completely clears out the reg entries etc. ). Your reply has made me think however that as it deactivated successfully on the physical machine not the VM, that I clone the physical machine again in its deactivated state. What do you think?