Thank you for your comments . This confirms my suspicion as I went on line and new e-mails started to appear on other people's computers.
I removed the virus with McAfee's Stinger and it worked like a charm. Initially I had installed Norton AV. When Norton was loaded the computer nearly came to standstill due the presence of the virus so i had to uninstall.
The moral of the story is don't go on line if you've got Bugbear. However this is difficult if you want to download a removal tool! - unless you can use another computer to do this.