I fixed it.
/var/qmail/rc :- #!/bin/sh
# Using syslod for logging # Using /usr/local/sbin/mailer to deliver local messages by default
$exec env - PATH="/var/qmail/bin:$PATH" \ qmail-start '|preline /usr/local/sbin/mailer $SENDER $USER $HOST' splogger qmail
/var/qmail/alias/.qmail-default :- |preline /usr/local/sbin/mailer $SENDER $USER $HOST
References in mailer to /usr/sbin/sendmail -fMAILER-DAEMON@$host";
Were replaced with qmail-inject and it uses the local spooler command to put the mail into /var/spool/mail and not the users home dir.
It also works with users that do not own their own home dir. This means the current POP account setup works
Thanks again to everyone
Darren