Its ok - I am back into the account now. I think its a problem with the 'alias' set up in Windows 8. It doesn't like my hotmail.com account and wants me to use hotmail.co.uk instead but when I signed out of hotmail.co.uk it did allow me to log back in.
I wish Microsoft had never bought Hotmail. This was all a lot simpler when my operating account and my pop up e-mail were separate. Am thinking of moving to Mac.