@sbillard, I only just got round to working on this, I removed echo htmlspecialchars($msg,ENT_QUOTES); which seems to have worked - thanks.
Regarding the the possible line breaks in the verification email link, I have taken the line into BBedit to look at it but cannot see any line breaks. It actually ceases to be a link right after the domain, so in the message you get http://www.domain.net as the link but /index.php? onwards is just text. Any you sure something isn't going wrong in the generation of the link?
Thanks
Steve