I suspect you might do better asking in the Lightroom forum. I don't use lightroom, but it seems reasonable that an earlier version will not know about later versions of Photoshop. Does this help at all?
Thank you both very much for your help.
It seems the problem is half fixed.
I stepped up to Lightroom 5 and the Lightroom bit does now work as I would expect it to. perhaps CC doesn't talk to LR4, only 5.... anyway, sorted.
It still does not work in the default Windows 7 picture viewer and when I use browse to locate any programme to open the picture it still doesn't work..... I can browse to PS CC no problem, but it is not opening the image.
With CS6 it worked fine!!!!
To fix this in Windows 7, open Regedit and edit the following registry key:
So that the value of the key is:
"C:\Program Files\Adobe\Adobe Photoshop CC (64 Bit)\Photoshop.exe" "%1"
The exact path may be different on your machine. Include the quote marks.