So.......

After exhausting all possibilities of incorrect wiring, shorts and bad earths I went out to my 4.8is and pulled the AHM module out if it. Before putting that module into the X5 that had the AHM burn out I popped the 2nd hand unit I bought into the 4.8is.

Immediately upon using any sort of lighting I had the "check trailer lights" message appear.

I then put the known good AHM module into my Diesel X5 and no more "check trailer lights" message.

So after about 25 hours of trouble shooting it turns out my soldering and rewiring job was perfect and the second hand AHM module I bought is faulty!

UNBELIEVABLE!

PS The reverse lights on the car are still supposed to light with a trailer on.