Thanks lotvic. Yes. I don't have a hotmail address and when I click to 'sign up' I get '..can't contact Microsoft Services right now etc.' Have checked network diagnostics and problem can't be identified. At one stage got a 0x800c0008 error message. Even tried a 'clean boot' though I may not have tried all the options on this yet.
Apparently that's a general network failure error. Apologies for asking an obvious question, but can the affected PC connect OK to the Internet? If it can, then does your security software have its own firewall? If it does then see if you can temporarily disable it for a while then try changing your account type again.
Have tried disabling firewall and I still get 'Sorry we couldn't connect to Microsoft Services right now. If this problem persists search for 'Network Problems' on the start screen. Done this but still get the same message
"While most Microsoft accounts will probably be associated with an @hotmail.com, @outlook.com, or @live.com email address, you can create a Microsoft account linked to any email address. For example, you could have a Microsoft account linked to your @gmail.com email address"