Success with the lights
Thanks to Andy Spencer who worked out what the issue was. We knew it was to do with the speed steps of the engines. My engines are all set to 14 speed steps, but the second hand MTS 3 central station was using 28 speed steps on every loco address.
It turns out the previous owner had used a Massoth dimax or something similar and set all the address on the central station to 28 speed steps, we then discovered it saves each address as a profile of some sort on the central station and stores all kinds of information eg. speed steeps, engine name etc.
We could see the previous owners large collection of stock that he programed to each address.
The only way we could reset each address was to use a dimax controller and change each speed step to 14 one at a time.
It turns out when programming address using the 55016P it does not change all the settings.
Now all light functions work using my 55016P controller. Hope this info is useful to anyone having similar issues.
now i just have to build my new railway!